Tammy RimesConsultant for Government Sourcing Solutions

Former Purchasing Agent, City of San Diego

Trends and Pathways…what’s the direction of

Purchasing for cities, counties & local

government?

History of Purchasing

1st documented Purchase Order!Written on a red clay tablet found in Syria - order for “50 jars of fragrant smooth oil for 600 small weight in grain”

• In United States, printing was one of a first services contracted out• In 1704, the first large procurement was for six large frigates for the new

U.S. Navy.• In 1778, the Congress approved the appointment of purchasing

commissionaires, who made 2% commission• One year later, in 1779, due to excessive costs and fraud, purchasing

officers were placed on salary.• Bad experiences with procurement procedure led to the1795 Purveyor of

Public Supplies Act. Misconducts and abuses in federal procurement led to an Act Concerning Public Contracts of 1808, prohibiting members of Congress from benefiting from government contracts and the Procurement Act of 1809, requiring competition in government procurement.

◦ In 1914, the Rockefeller Foundation funded a series of intensive studies regarding problems of public administration.

◦ In 1919, a 275-page book, Principles of Government Purchasing, was published

◦ New public procurement professional associations - National Institute of Governmental Purchasing, Inc. (NIGP) and the National Associations of State Procurement Officers (NASPO); formal training programs developed with certifications.

◦ The “Uniform Commercial Code” (UCC) and completed it in the fall of 1951.

◦ In 1979, the American Bar Association (ABA) issued The Model Procurement Code

History of Purchasing

Purchasing…what’s the big deal?

Local purchasing - Current Environment

More entreprenueal businesses were started during the recession

More companies interested in govt business Purchasing teams have been reduced Pressure to save money, buy local, and

purchase green…all at the same time! Lots of emergencies Everything is PUBLIC INFORMATION!

Trend 1 – Cooperative Purchasing

Nearly every state, city, school district, higher education institution can “piggyback” on another government’s contract

Terms and conditions can be “localized” such as Minimum Compensation Ordinance, Healthcare Accountability Ordinance and Disadvantage Business Enterprise

Endorsed by American Bar Association and every public procurement association

Savings can begin in weeks / minimal staff resources Choose the vendor, find the contract for special

circumstances

U. S. OPEN

Trend 2 – Social Goals

More cities/counties/local governments are implementing social goals as part of their contracts:

Diversity or local presence standards for additional points

Minimum living wages or health benefits

Equal benefits for same-sex or domestic partners

Increased requirements for recycling or purchasing green or recycled products

Business and Benefits?

Trend 3 – Increasingly Political

Move to Strong Mayoral forms of government for cities, or more interaction by Boards and Councils in Purchasing

Everyone knows how to do Purchasing! Headlines with the few bad apples or perception issues

based on nothing! More protests on construction bids Overturning Purchasing recommendation during

routine award presentations

Squeaky Wheel gets the contract!

Trend 4 – Reduced team/resources

Budget cuts through the recession have reduced Purchasing team numbers

Old adage “do more with less” is lived every work day Little to no money for staff training or development The workload has remained the same or increased Retiring workforce and historical knowledge gone We get no respect – very few in the “real” world knows

what a CPPO or a CPPB is!

NIGP - Standardization of Profession

Eprocurement Systems On-line Surplus Auctions Just In Time Delivery On-line ordering directly from vendors Use of P-Cards Reverse Auctions

Trend 5 – Automation

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Case Study: Salt Lake County –Vendor Managed Inventory for Fleet Parts

Implemented customized fleet inventory management system 4,000 pieces of equipment (chain saws to fire trucks) County moved from owning and managing $700,000 - $800,000

of inventory to $0 – only pay for parts when needed Eliminated parts obsolescence and shrinkage – no waste Cost of parts per hour has dropped from $80/hr to $60/hr Increase fill rate from 50% to 80%+ Reduced number of monthly invoices from 3,000 – 4,000 down

to 3 or 4 Increased productivity

New Way of doing Business

Case Study: County of Sacramento Job Order Contracting

Featured in American Public Works Magazine April 2010 Since 2003, have completed $100M in over 50 contracts Projects rolled out in 4-6 weeks instead of 4-6 months Insurance and bonds received one time Use of local contractors can be encouraged or required Loss of adversarial relationship with contractors Main jail floor was finished in 90 days, instead of estimated

270 Great for small projects, emergency work, repetitive work

New Way of doing Business

Final note – Are you having any fun?

Go forth and Procure!

“Enthusiasm is one of the most powerful engines of success. When you do a thing, do it with all your might. Put your whole soul into it. Stamp it with your own personality. Be active, be energetic, be enthusiastic and faithful, and you will accomplish your objective. Nothing great was ever achieved without enthusiasm.”

Ralph Waldo Emerson

“Don’t tell yourself no…the whole world will be telling you no. Give yourself a “yes” and go for it!

Tammy Rimes

I would love to be a resource – Need an new idea?

Managing Procurement Teams Conference Speaker Printing Maintenance, Repair and Operations Mailing Equipment eProcurement Systems IT Staff Augmentation Online Surplus Auctions Office supplies Janitorial supplies Equipment Maintenance Furniture Auto Parts

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Tammy RimesConsultant – Author – Speaker

tammy@tammyrimes.com760 789-3689