"If you are going to sin, sin against God, not the bureaucracy. God will forgive you but the bureaucracy won't." -- Adm. Hyman Rickover

One day in 1999, Dave Barram stood in his kitchen and stared down at a Washington Times headline, which screamed that his proposal to close down the General Service Administration's (GSA) eight warehouses was going to get a bunch of blind people fired. The one thought running through his head was, "Ushering in the future can be a lousy job."

Barram, a Clinton administration political appointee, was head of the GSA, the federal agency responsible for erecting and maintaining government buildings; purchasing and distributing billions of dollars in goods and services; maintaining the vehicle fleet; and innumerable other mundane, complex, expensive and unsexy tasks that keep Uncle Sam functioning. By the mid-1990s, it became uncomfortably clear the GSA was in trouble.

In corporate America, almost everything the agency did -- from procuring supplies to selling surplus property -- was being transformed by technology. But the GSA went about its business the same way it had for decades, funded solely by revenues from services it provided to other federal agencies -- services that other companies could now perform far more efficiently. Barram, a Washington transplant who spent decades managing the financial operations of Silicon Valley colossi such as Apple Computer and Silicon Graphics, was painfully aware the agency had to either rise with the digital tide or get swamped by it. When he first arrived in Washington as the Deputy Secretary of Commerce, the former Apple executive asked for a Macintosh in his office. A few hours later, he received a dusty, five-year-old Mac 2 that was ceremoniously produced from the far corners of the building's basement.

This was precisely the sort of archaic mentality Barram was determined to banish. "Given where they were, it was impossible in the environment I came into in the federal government to use technology too much," he said. His early attempts to turn GSA into a public-sector exemplar of private-sector efficiency included such relatively uncontroversial projects as GSA Advantage -- a virtual marketplace that let federal employees purchase more than 100,000 different supply items online; mandatory purchase cards (in essence, government credit cards) for transactions under $2,500; and FirstGov.gov, the federal government's Internet portal.


The Warehouse Battle
From a private-sector perspective, Barram's decision about the warehouses seemed straightforward. The advent of online procurement, just-in-time delivery methods, electronic purchase cards and nationwide supply companies, such as Office Depot, had long since rendered obsolete the practice of warehousing huge stockpiles of goods for weeks, months or even years at a time. (Dell Computer Corp., for example, maintains less than a week's worth of inventory at any one time.) The GSA's supply-chain system, by painful contrast, remained dominated by hamlet-sized warehouses considered state-of-the-art back when America liked Ike.

Clearly the GSA could save many millions of taxpayer dollars by moving its operations out of the warehouses and onto the Web. In fact, Barram's early initiatives, like GSA Advantage and purchase cards, already partially achieved this goal.

So in July 1999, Barram announced his intention to shut down the GSA's eight monstrous warehouses and move toward a "virtual platform." Henceforth, supplies would be ordered from GSA's Web page and delivered directly from vendors to agencies. "The warehouse business was a billion and a half business that had declined to under $1 billion, and eventually it was going to zero," Barram said. "There was no point in trying to hold onto a declining program."

If Barram were still at Apple, the same decision would have been a no-brainer. In fact, failing to perform such cost-cutting might be considered reasonable grounds for dismissing a Fortune 500 CFO.