Bill McCarty and Jay Wavering provide a city government perspective on changes in procurement practices. McCarty is the head of the City of Springfield’s Office of Budget and Management, which oversees purchasing and fleet in Illinois’ capital city. Wavering heads up Procurement.
Under the direction of Mayor Michael Houston, the City is updating its procurement model to incorporate industry best practices, such as cooperative purchasing, with an eye toward cost savings and efficiency.
Wavering said his group recently reinvested in a membership in the Illinois Association of Public Procurement Officials for purposes of procurement staff education, training, and to enable benchmarking. It has also joined the National Joint Powers Alliance (NJPA) and National IPA for purchasing. McCarty and Wavering said the City plans to expand cooperative purchasing ventures as much as possible and are pleased with efforts to date.
The City is currently working to consolidate all fleet services following a comprehensive review by the CST Fleet Services consulting firm.
McCarty said, “Organizational and management changes currently under way will streamline fleet-related procurement by centralizing the process of assessment and initialization within a new City-wide fleet division. The City’s new Fleet Management Division (FMD) will work directly with City Purchasing on all fleet-related needs. This will increase savings through enhanced economies of scale and reduce instances of redundant purchasing.”
The City presently utilizes a conventional request for proposal (RFP) process to obtain the majority of goods and services for its fleet. For vehicles, the City uses its own contracts, State contracts, and cooperative contracts. For parts, departments bid parts contracts separately, but purchasing will soon be combined across four departments. For fuel, the City is considering joint purchasing with other units of government.
Going forward, by combining purchasing power internally and reaching out to other government entities to establish cooperative agreements, the City expects to find cost savings and enjoy the benefits of sharing the workload for establishing contracts.
For example, the Park District has initiated an intergovernmental agreement, undergoing review for approval, which will allow it not only to jointly purchase anything with the City, but also to purchase fuel at the City’s fuel pumps. Parks expects savings of about 50 cents per gallon, and the City is looking into partnering with other agencies as well.
[PAGEBREAK]The City funds its individual fleets independently through their respective departmental budgets, a practice that will change once consolidation is completed.
“The [user] department will have liaisons to the FMD, but FMD will make fleet-related expenditures out of an internal service fund and charge departments back for their respective costs,” McCarty said.
When the City sets up master contracts for fleet purchasing, it now incorporates the requirements that vendors match or better state contract prices.
Both McCarty and Wavering cite enhanced transparency and accountability as key goals for their departments.
Springfield is using the Web for many of its procurements, for access by vendors and the public. It implemented a new procurement bulletin online.
“The bulletin increases public awareness of what we are buying, how we buy it, and who we buy it from, and makes the entire process much more open, defeating favoritism and opening up procurements to a much wider base of vendors,” Wavering said. He added that reaching more vendors can translate to better pricing and higher quality proposals. Plans call for the City to post award notices online with awardee recommendations, giving the public a window into the process and to protest awards or find out why a certain vendor was selected.
More Savings Expected
The City’s use of procurement cards, or “P” cards, for small purchases, may lead to additional savings.
Wavering pointed to savings the City is poised to recognize through a cash-back program on the credit card purchases, currently under contract negotiation. “This would qualify the City for cash-back rewards while eliminating paper and reducing the number of checks processed,” he said.
Springfield City officials claim they will have more procurement wins to brag about in the coming year. The City has hired Mike Palazzolo to oversee the City’s newly consolidated fleet, and it plans to continue in the direction of more cooperative purchasing.
About the Author:
Barbara Bonansinga is a public service administrator, Division of Vehicles, at the State of Illinois. She is president of the National Conference of State Fleet Administrators (NC-SFA) and a member of the Government Fleet Advisory Board.