AgdaPkt 2018-09-10 Joint SA PFA - Laserfiche WebLink

Browse Search

6.1.B. - Page 10 The Cities' shift from centralized to decentralized purchasing systems evolved over time on a local basis, with individual cities responding to the immediate needs and available resources. Regardless of a particular city's path towards decentralized purchasing, cities lost the expertise necessary to negotiate these kinds of savings. Apart from some employees in public works and engineering departments, most purchasing activities are a secondary responsibility for the employees responsible for their department's procurement function.34 While these employees all receive training on municipal purchasing guidelines and policies, they often lack training and familiarity with advanced procurement practices.35 For many cities, training employees in purchasing practices found in a centralized purchasing department is prohibitively expensive. 36 This loss of purchasing expertise has real financial consequences. For instance, most of the Cities' employees are unaware of and untrained in the use of cooperative purchasing databases.37 Cooperative purchasing databases, like the California Department of General Services' (DGS's) State Contracts Index Listing and State Leveraged Procurement Agreements, are databases of pre -negotiated contracts for common goods and services, for prices lower than market .38 By not piggybacking on these pre -negotiated contracts, the Cities miss the opportunity to purchase a wide range of products at lower prices. Employees in decentralized systems often do not identify commonly purchased goods that other departments are also buying and so miss the opportunity to negotiate lower costs which could be obtained by purchasing the items in bulk for multiple departments. 39 While finance officers do track purchases on a departmental level, only the City of San Mateo has a staff position dedicated to tracking the cost, type, quantity, and frequency with which all city departments are purchasing products .40 In cities that fail to track products purchased across multiple departments, finance officers cannot identify goods (like office supplies, furniture, automobile parts) and services (like translators), that could be purchased in bulk through a volume discount contract. In effect, each individual department pays for goods and services at a price that is higher than could be achieved through purchasing at the municipal level.41 Conversely, in centralized purchasing systems a dedicated staff of purchasing agents specializes in securing the lowest prices for goods and services. 42 Purchasing agents have the training, resources, time, and specialization to identify the best vendors and negotiate below-market prices through leveraging their city's market power. 43 Purchasing agents have the authority and capacity to unlock low prices by buying in bulk, authorizing long term contracts, and negotiating volume discounts. Centralized purchasing agents also have acquired specific purchasing 34 Interviews with City Finance Officials. 31 Interviews with City Finance Officials. 36 Interviews with City Finance Officials. 31 Interviews with Finance Officials. 38 Procurement Division "Leveraged Procurement Agreements (LPAs) California Department of General Services Accessed on April 5, 2018. <httr)://www.des.ca.eov/Dd/Programs/Levera2ed.asnx> 39 Money Matters "Centralized & Decentralized Purchase: Suitability, Merits and Detriments" 2018. " Interview with City Finance Officials. 41 Ibid. 42 Clifford McCue, Jack Pitzer "Centralized vs. Decentralized Purchasing: Current Trends in Governmental Procurement Practices" 2000. 43 Ibid. 2017-2018 San Mateo County Civil Grand Jury