In response to "Why Nader’s Microsoft plan is flawed" reader James Love writes:

On June 4, Ralph Nader and I wrote a letter to the U.S. Office of Budget and Management, asking that the federal government use its power as a consumer to "solve issues concerning security and competition in the software market." Dan Farber roasted us in a commentary on ZDNet that had a lot of entertaining jokes, but also some misplaced jabs.

One item that should be cleared up is the false notion that we asked the U.S. government to consider buying "the code for Microsoft Office outright." What we did ask OMB to look at was the cost of buying and putting into the public domain "the code to the components of a high quality office productivity package," and to compare that to the cost on perpetual leases of software. Microsoft would indeed be a pricey source for this, but there are also interesting alternatives, including Lotus or Corel office suites, two good but not very profitable products that suffer mostly from compatibility concerns.

Buying the code outright was only one of several items on a larger menu of possibilities. A more incremental step to promote competition (not mentioned in the ZDNet article) would be to require Microsoft to fully disclose the default data file formats. Many experts think this would be helpful, since much of the lack of competition is driven by concerns over compatibility of data formats. It is hardly unreasonable for the U.S. government to want to know the format that its own data in stored in.

Mr. Farber said, "it is the Department of Justice that deals with anti-trust issues, not the OMB," and he worries that if the government uses its purchasing power to promote competition, "at what point does that action become illegal and anti-competitive to Microsoft?"

A lot could be said about Mr. Farber's concerns, and one point is that the U.S. government has no obligation to buy the products offered by any business, including a global monopoly like Microsoft. The federal laws and regulations on procurement specifically create a framework for establishing or maintaining alternative suppliers, so they don't become captive customers of contractors.

Of particular interest is FAR 6.202, which reads:

6.202 Establishing or maintaining alternative sources.

(a) Agencies may exclude a particular source from a contract action in order to establish or maintain an alternative source or sources for the supplies or services being acquired if the agency head determines that to do so would

(1) Increase or maintain competition and likely result in reduced overall costs for the acquisition, or for any anticipated acquisition;

In explaining FAR 6.202, an OMB official told us, "A good example would be that the government has run two lines providing cruise missiles from different manufacturers in order to keep one manufacturer from becoming a sole source." Looking at competition is in fact part of the procurement legal framework, not an unlawful act, as was suggested in the ZDNet article.

The history of using procurement to achieve competition or social ends is fairly long, and more important than most realize. The modern generic drug industry was created by Department of Defense procurement policies. Many new environmentally sound products, including recycled paper or energy efficient office designs, were led by government procurement. Government purchases of cars with airbags demonstrated the feasibility and benefits of that technology. And for decades when IBM was the dominant computer company, the federal government deliberately kept some competitors in business, to avoid IBM having a complete monopoly on data processing.

OMB is looking at these issues right now, and we hope they undertake a sound cost benefit analysis of the alternatives, and avoid making decisions based upon ideology or unwillingness to buck the power of entrenched vendors.

James Love is the Director of Ralph Nader's Consumer Project on Technology.