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POLICY AND ECONOMIC FRAMEWORK FOR PUBLIC-PURPOSE 48 ENVIRONMENTAL INFORMATION SYSTEMS latter case the source of funding will depend on circumstances, but may be public, charitable, or commercial. Yet other branches will be maintained by government agencies for public health and safety or operational purposes. Determination of the mode of operation that is most beneficial to society requires a detailed ongoing analysis of the specific circumstances for each branch, taking into account user needs for data access and standards as as considerations of market size and differentiation. The Potential for Purchasing Data From Commercial Entities Provided certain conditions are met, government agencies may choose to purchase observational data from commercial entities for use in the core products. To be useful for such purposes the purchased data must be free of restrictions on use and redistribution and they must meet stringent quality standards (e.g., calibrated and adequately documented). Any compromises on documentation and openness to scientific audit (see Box 4.1) may materially detract from their value. In addition, the commercial vendor's assurances of a continued supply of data must be sufficient to justify government investment in the preparation of products that make use of them. Under these conditions, a competitive procurement based upon careful specification may lower costs below those of government operation of the same root, and hence be to the public benefit. The principles outlined above for analyzing the competitiveness of homogeneous or differentiated products markets within which such a procurement would take place are still applicable, although the term âproductâ now refers to the purchased data, and the government is a customer, not a supplier. For a market that is not fully established the information necessary to apply the principles may be incomplete. However, even existing established competition among suppliers is not conclusive evidence that such competition would apply to the government procurement. Indeed, the number of suppliers may decline if the government is the sole buyer for a distinct product. This is because the government data policy and quality specifications may be so stringent that they impose substantial costs to a potential vendor, in addition to the same fixed cost of satisfying the needs of other customers. If the government were the sole buyer for this distinct product, a new
