Save Money by Not Buying ‘Government’ Auction Guides

All through the radio ads for the “Action Guide to Government Auctions,” one hears of the government--government agencies, government sales, government mailing lists. Clearly this is no fly-by-night offer.

There’s an 800 number, the suggestion that callers have credit cards handy, and no mention of price, and finally, a disclaimer of any affiliation “with the U.S. government or any government agency.” The word “government” nevertheless runs through the hustle on the toll-free line, and it is a hustle. The 284-page book costs $89.95 plus $8 shipping, and without a credit card number, “Jeff,” for one, won’t even provide an address “until you call us up with a money order in your hand and give us the serial numbers.”

Although the guide is questionable, the auctions may be real. But care is needed here. Any claim that rides on the full faith and credit of the U.S. government has instant credibility, even when the implied claim of government attachment is obscure. Fortunately, as claims go, these are easy to check.

There are such things as government auctions, involving goods that one or another government agency wants to sell off, fast and fairly. Some goods were seized by agencies with seizing authority--the IRS, Customs, various arms of the Department of Justice. Some goods are just no longer needed or need replacement--vehicles, for example.

Some agencies conduct their own auctions. The Internal Revenue Service, for example, holds auctions in any of its 50 districts where the collections division, after giving taxpayers ample opportunity to pay a debt, has seized property--cars, boats, office and even industrial equipment. Of the IRS’ 14,007 seizures in fiscal 1988, 3,175 ended up at sale or auction, bringing in $32.9 million.

Some leave the selling to another government arm. The Defense Department sells off surplus from the branches of the military; the U.S. Marshals Service or the General Services Administration do sales for civilian agencies--the departments of Justice (DEA, FBI, INS) and Transportation, the FAA, NASA and others.

Generally, a local U.S. Marshal’s office handles seized goods, the GSA the surplus--everything “from soup to nuts,” says Bill Tesh, chief of the sales branch of the GSA’s property management division in Washington, “anything the government has in its inventory and no longer needs,” including office equipment, machinery, electronic goods, and all those government vehicles. Basically the landlord and purchasing arm of the federal government, the GSA took in more than $100 million in fiscal 1989 from sales--about 30 in each of 11 regions.

Government agencies may also hire outside contractors, as does U.S. Customs, which probably seizes more salable property than any other agency (the DEA’s drug seizures may have the highest value, but can hardly be auctioned off). After giving owners plenty of notice, and offering goods to any government agency that might have a use for them, Customs sells off abandoned and forfeited goods, from household furnishings to foreign cars that would need costly modifications for use here.

But Customs’ contractor, a Lawton, Okla., division of Northrop Worldwide Aircraft Services, is no big success. As the General Accounting Office revealed at congressional hearings this month, Northrop over the past two years produced a net gain of $9.8 million on property valued at $439 million, or 2 cents on the dollar.

Government auctions, however, aren’t necessarily a giveaway, as Action Guide ads claim, mentioning $50,000 boats for $10, $200,000 houses for $15. The GSA, says Tesh, establishes for everything that it sells “an honest value the public should have no objection to paying, and will not let it go for less.”

Similarly, the IRS, says Marvin Chotiner, former chief of special procedures for the Los Angeles district’s collection division, “establishes a minimum bid” for everything. If goods seem cheap, they’re also “subject to any encumbrances,” says Chotiner. “We issue no guarantees.” Property is sold without title searches, and a gold and diamond ring is listed as “a yellow metal ring with three white stones.”

But the question here is not the value of government goods but of the advertised Guide. One can scarcely learn what’s in it before buying. One toll-free voice says $97.95 buys the book, plus “free catalogues and addendums for the rest of your life.” Another says the Guide only “tells you how to get on mailing lists,” how to locate the auctioning agencies. “You never find them in the phone book,” said “Jeff.” “These are not public auctions; the government does not advertise.”

Baloney. The agencies involved are in local phone books, or those of nearby regional centers: Who wants countrywide listings and faraway auctions? The government wants to sell. A call to any local number for Customs, the GSA and even IRS taxpayer assistance elicits the right number for auction information. Many of those have recordings, listing several weeks worth of upcoming auctions and providing more numbers (the GSA sales office, the specific IRS revenue officer involved) for more information.

What’s more, many agencies do advertise. Northrop, for example, advertises Customs sales in three consecutive weekly ads in the local paper, or in specialty magazines. The IRS advertises in legal newspapers because, says Chotiner, “a lot of people who are into the auction business, that’s where they go and look.”

Some even maintain mailing lists. GSA’s mailers are regionalized and free. Northrop’s notices of Customs sales cost $25 a year for the Eastern or Western U.S.

Actually, the $97.95 Action Guide may be unique in its price and radio advertising, but not in ploy. There have always been similar ads in newspapers and magazines, says Tesh. They advertise general “surplus” or more specifically, “World War II jeeps, send X dollars, and you’d send in X dollars and get information saying get in touch with the GSA or the DOD.”

One could do that in the first place. And save a lot of time and money.