SUNNYVALE, CA - May 2, 2005 - AMD strongly supports recent actions by the Japanese, French and U.S. governments to stimulate competition in government technology procurement by curbing preferential practices that advantage specific companies. These efforts shed light on the continued specification of brand names in public tenders, an ongoing problem that reduces market competition and inhibits innovation while needlessly costing taxpayers money.
The new Japanese, French and U.S. guidance builds on actions taken by a number of governments around the world over the past two years. Germany, Italy, Sweden, Belgium and Russia have all publicly called for independent benchmarks or vendor-neutral procurement in the IT sector to stimulate competition. Because of the newly-issued guidance, these countries are moving toward basing tenders on objective benchmarks and performance measures instead of brand names - a move that encourages fair and open competition.
"The commendable actions of the Japanese, French and U.S. governments underscore the mounting worldwide problem of closed bidding practices in public IT procurement and the urgent need for governments to bring their agencies into compliance for the benefit of taxpayers," said Sue Snyder, AMD vice president of international policy & relations and executive legal counsel. "Governments should base their procurement decisions on getting the best technology available at the best price available to meet their needs. Greater competition fosters innovation while keeping prices down and providing governments with more choices of appropriate products."
Last week, the Secretariat to the Inter-Ministry/Cabinet Consultative Committee on Information Technology System Procurement in Japan issued a memorandum reminding each government ministry and agency to abide by the "Guidance for Preparing Specifications Related to Procurements for Computer Products and Services" (dated May 1995) which states that IT procurement must be implemented in a manner that maintains transparency and fairness and secures fair competition. Additionally, it prohibits agencies from stating requirements by only using trade names, and the context of requirements must be neutral.
This follows a memorandum issued March 31st from the Ministry of Economy, Finances and Industry in France which instructs public purchasers of IT equipment to use unbiased technical specifications in tenders. The guidelines prohibit the use of brand names as well as "minimum frequency requirements" which the Ministry views as discriminatory and exclusionary. The Ministry suggests benchmarking as a viable alternative to frequency requirements.
In April, the U.S. Office of Management and Budget released a memorandum to all chief acquisition officers, chief information officers and senior procurement officers in the government requesting that they use objective benchmarks and performance measures for contract specifications, and adhere to the Federal Acquisition Regulation (FAR) requirements restricting the use of brand names.
The European Commission noted in a study last year that application of its new procurement rules has reduced prices by approximately 30 percent.
To obtain the latest edition of AMD's Benchmark Procurement Guidelines, please visit http://www.amd.com/procurement
AMD's Position on Fair and Open Competition
AMD stands for fair and open competition and the value and variety competition delivers to consumers. Businesses and consumers should have the freedom to choose from a range of competitive products that come from continuous innovation on a level playing field where everybody plays by the same set of rules. When market forces work, consumers have choice and everyone wins.
