Amazon’s National Contract to Supply Local Governments Puts Cities and Schools at Risk, ILSR Report Finds
Stacy Mitchell & Olivia LaVecchia | July 10, 2018
Amazon's growing power in the consumer market has drawn a lot of scrutiny lately. Meanwhile, however, Amazon's been moving largely unnoticed to capture another large stream of spending — the public sector's.
Last year, Amazon secured a national contract to supply cities, counties, and schools with office supplies, library books, electronics, and more. The contract has an estimated value of $5.5 billion over 11 years, and more than 1,500 local governments around the country have already signed on, but there's been almost no reporting on the deal.
Today, we released a report that looks at how key aspects of both this contract and Amazon's push into public purchasing should alarm citizens and elected officials. To begin with, the terms of Amazon's contract depart in striking ways from established norms in public sector purchasing, favoring Amazon at the expense of the public. The contract lacks standard safeguards to protect public dollars, and puts cities, counties, and schools at risk of spending more and getting less.
The contract also poses a broader threat, our report finds. Amazon is using the contract to position itself as the platform through which other companies have to go to reach government buyers — and as it does so, fortifying its position as the dominant platform for online commerce. Meanwhile, independent office products dealers, which have a market share of about 20 to 25 percent, are getting shut out.
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Olivia LaVecchia & Stacy Mitchell | July 10, 2018
Our new report investigates how a recent contract opens the way for billions of dollars in local government spending to shift to Amazon. But there's good news for concerned citizens and public officials: Amazon's push into the public sector offers a way to take action at the local level and start a concrete conversation about Amazon's power and what we should do about it.
Some cities are already pushing back, rejecting the contract and adopting policies that ensure that public spending supports a diverse, equitable economy.
In this fact sheet, we look at three strategies you can use to take action. They are: Contact your local reporters and news media with this information, ask your local officials to reject the Amazon contract, and start a broader conversation about Amazon's power. For each strategy, we also include specific asks that you can make and resources to use.
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Our new report on Amazon's growing relationship with local governments is out today. Journalists are already covering the story, including in pieces by Abha Bhattarai in
the Washington Post, David Dayen
in In These Times, and
The Capitol Forum.
We're hoping that local reporters around the country will use this report as a jumping-off point for their own investigations into their city and Amazon, and
we'd love your help reaching the journalists where you live. After all, this story offers a rare local angle on Amazon. We have more information on how to talk with reporters in our action sheet above, and you can also forward them
our press release.
Finally, if you like getting information through audio, keep an eye on the feed for our
Building Local Power podcast. Our latest episode will drop on Thursday, and will feature report co-authors Stacy Mitchell and Olivia LaVecchia discussing the report with ILSR's Nick Stumo-Langer.
See the Building Local Power podcast homepage.
Don't Miss Our Other Resources on Amazon
- In a cover story for The Nation, we look at Amazon's growing dominance from the perspectives of the businesses that have to compete with it, the people whose wages and working conditions are affected by it, and the communities whose vitality and self-determination are at stake as Amazon grows. The piece concludes by outlining the new push by political leaders to restore antitrust policy, and why it's so important.
- In an episode of our Building Local Power podcast, we talk about Amazon's acquisition of Whole Foods, and how the deal allows Amazon to leverage its new brick-and-mortar presence to expand its dominance of online commerce.
- In an easy-to-share infographic, we break down the hidden costs of Amazon's rapidly expanding empire, and look at how shopping at Amazon compares with shopping at local businesses in its impact on jobs, taxes, the local economy, and community.
Finally... From informing policymakers to shaping media coverage, our research on Amazon is making an impact. Please help us work to create an economy that's more competitive, equitable, and prosperous by making a donation today.
