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Justifying the Intel inside government contracts

Federal agencies must now publish a rationale for use of all brand names, including those of PC chips.

Government agencies must now publicly justify their use of brand-name requirements in contract specifications.

Last year, the U.S. Office of Management and Budget began requiring government agencies to prepare "brand-name justification documents" for contracts exceeding $25,000. A brand-name justification spells out the reasons for requiring a specific brand to be used over another, if that brand is mentioned in the description of specifications for government contract work. The rules now require agencies to publicly post the documents when listing contract opportunities. Eventually, the government will automatically prompt agencies to include the data when posting contract solicitations.

"Agencies should encourage their acquisition professionals to limit the use of brand-name specifications and maximize competition," Robert Burton, associate administrator for the OMB's Office of Federal Procurement Policy, said in an April 17 memo.

In February, Advanced Micro Devices released a report finding that vendor-neutral contract specifications maximized competition. The report specifically cited examples in which overuse of the Intel brand name in computer specifications cost taxpayers more money. The OMB memo discourages this by forcing employees to justify use of a specific brand.

"This is a memo essentially making the requirements or justifications available to the public by posting them online. (It) makes the process more open, which is fine with us," Intel spokeswoman Jennifer Greeson said in response to the new OMB policy.

The European Commission has also sided with AMD and has begun discouraging government procurement agencies from using brand names in their instructions for government contracts.

AMD and Intel have been vigorously fighting for market share on many fronts. This change in federal procurement follows news of AMD's antitrust lawsuits against Intel in the U.S., as well as Japan.