Neighboring Cities Outsource Fleet Service to King County

July 2004, Government Fleet - Feature

by Cheryl Knight - Also by this author

Government fleet departments continue to face reduced county revenues and limited capital resources. Finding a way to effectively provide ongoing services within existing resources remains a challenge.One county in Seattle, Wash., however, has created a fleet services program designed to assist governmental entities. The Win-Win Program, a non-profit, single-source fleet services program administered by the King County fleet administration division, was developed 10 years ago and is still going strong. Under the Win-Win Program, King County leases more than 650 vehicles and sells thousands of supply items to regional government agencies, such as municipalities, sewer and fire districts, housing authorities, libraries, and other government units.Win-Win Program Provides Competitive Pricing
Win-Win operates in conjunction with the sheriff’s office and the roads division to provide better, faster, and cheaper fleet services.With the implementation of the program, the county receives additional revenues, maintains an experienced workforce, and shares overhead costs with other government agencies.In return, other governmental entities get the use of vehicles and equipment, expert advice, and quality goods and services at a cost lower than they could obtain individually. In addition, they reduce operating costs because the county provides personnel, administrative services, accounting, warehousing, maintenance services, and routine repair services. King County handles all purchasing, bidding procedures, inventory control, invoicing, and warranty programs for these regional government agencies.“The program frees customers’ capital for investment opportunities, as well as reduces or eliminates the need to resort to new or increased taxes,” says Windell Mitchell, director, King County Fleet Administration Division.Because the program is non-profit, participating regional government agencies purchase goods and services at cost plus a markup to cover their share of overhead.Products include:
  • Vehicles, including cars, trucks, and heavy construction equipment.
  • Automotive parts, including snow plow blades, tires, batteries, and items as small as wiper blades.
  • Traffic items, including control signs, custom signs, decals, banners, and cones.
  • Construction materials, including catch basins, culverts, paint, building materials, and cement.
  • General store items, including industrial safety items, hardware and tools, emergency products, and janitorial supplies.Stock is determined by customer needs. Volume purchases, competitive bidding, and price-comparison shopping guarantee competitive pricing. A guaranteed buy-back policy of unsold items eliminates stock obsolescence.{+PAGEBREAK+}County’s Fleet Services Program Achieves 10 Years of Growth
    The Win-Win Program continues to thrive, growing from three regional government customers in 1993 to 110 today. In a recent survey, 92 percent of Win-Win clients said that they were “satisfied” with the services they received.Further illustrating the program’s success, Win-Win generated $3.7 million in revenue to King County in 2003, including $1.6 million from police vehicle leases, $1.1 million from leasing road equipment, $300,000 from maintaining other agencies’ vehicles, and $700,000 from sales of materials and supplies.Meanwhile, municipality customers saved significantly. A survey completed by King County’s fleet administration division shows that customers lease vehicles through the county at rates 50- to 89-percent cheaper than private sector competitors. Leased county off-road equipment garners additional savings.Agencies also save on fleet maintenance and repairs because the King County fleet administration division is factory-authorized to perform warranty and routine repairs. “One study estimates municipalities save 10 cents for every dollar in purchases through the program,” says Mitchell. “The savings stem from the division’s aggressive application of early payment discounts, comparative price shopping, elimination of waste and obsolescence due to buy-back and volume discount purchases, and guaranteed buy-back of heavy equipment by manufacturers after a five-year use.”Participating government units are able to save up to $4,000 per vendor purchase by eliminating 12 of 14 purchasing steps, a considerable savings, especially when dealing with multiple purchases.Win-Win participants do not have to research sources, develop vendor lists, obtain signature approval, prepare bid documents, schedule and conduct pre-bid conferences, make bid revisions, send out bids, tabulate responses, evaluate and select vendors, address bid protests, or monitor for compliance. Only one check is written for one invoice, regardless of the number and variety of items purchased, which helps reduce accounts payable workload. Customers’ purchasing turnaround time is reduced from the normal 60 days to same-day, improving customer responsiveness and reducing the cost of downtime.“The program enables customers to buy multiple items in one place, with one invoice, at a guaranteed competitive price, without having to seek competitive bids, and yet still be in full compliance with federal, state, and county purchase policies,” says Mitchell. In-House Service Trend Presents Roadblock for King County
    While the Win-Win Program continues to grow each year, Mitchell says there is still one major roadblock that King County faces.“One obstacle is the political willpower to transcend the desire to perform all work in-house, even in cases where it can be demonstrated that it is more cost-effective to have it done by others,” he says. “Few governmental entities are willing to give up any control; each more or less is a separate fiefdom, and sharing does not come naturally — even when it logically makes sense.”According to Mitchell, the best candidates for this type of program exist where special expertise may be lacking, resources are limited, and the demand for service is great.
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