How to Regulate a Market

The clause at DFARS 252.246-7008, titled Sources of Electronic Parts, begins like most other DFARS clauses: the big buyer in a monopsony makes an explicit demand because it assumes no market forces will implicitly make sellers meet the requirement. Statute requires this, and there is no way around it: the demand must be made explicit to sellers to protect the government's interest. Cheap parts exist in the market, and Warfighters can't have their plywood huts burn down when they plug junk parts into the generator. That is the "why" behind DOW requiring this, but my question is how should DOW do it? Should it keep being explicit and ham-fisted, or does that somehow stifle a marketplace? The clause is required by prescription in commercial contracts.