Purchasing Alliance Saves Counties, Cities, Schools, and Nonprofits $735 Million on $5 Billion in Purchases
Marking its 10-year anniversary, an innovative government purchasing alliance has saved counties, cities, schools, and nonprofit organizations across the country $735 million on $5 billion in purchases, according to officials representing the U.S. Communities Government Purchasing Alliance.
U.S. Communities provides a money-saving national purchasing forum for local and state government agencies, school districts (K-12), higher education, and nonprofits nationwide by pooling the purchasing power of over 87,000 public agencies in the U.S. and Canada. The alliance was founded in 1996 by the National Association of Counties (NACo), the United States Conference of Mayors (USCM), the National Institute of Governmental Purchasing (NIGP), the National League of Cities (NLC), and the Association of School Business Officials (ASBO).
The cumulative savings were immediate and have grown steadily since the purchasing alliance was implemented: $3 million saved in 1997; $8 million saved in 1998; $16 million saved in 1999; $29 million saved in 2000; $34 million saved in 2001; $48 million saved in 2002; $53 million saved in 2003; $74 million saved in 2004; $108 million saved in 2005; and $152 million saved in 2006. Officials estimate that U.S. Communities will generate $210 million in savings this year.
Rick Grimm, chief executive officer of NIGP and chair of the U.S. Communities Board of Directors, reports that total purchases have exceeded $5 billion over the 10 years of the program, including 2007 estimates.
Grimm says that U.S. Communities was born of the need for local agencies to find more efficient ways to purchase commodities and services. This was never more apparent than in 1996 when Congress decided to close Federal General Services Administration schedules to local agencies. In an effort to bring efficiencies and savings to local governments, the idea of a national buying cooperative took hold.
The savings, purchasing power, and reach of the alliance have far exceeded expectations, Grimm says. For 2006, savings of $150 million were documented on purchases exceeding $1 billion. More than 20,000 public agencies today are registered and participating in the program.
Supervisor Gerry Hyland, Fairfax County, VA, a founding member of the alliance and an original member of the advisory board, says using the U.S. Communities program has saved Fairfax County millions of dollars in purchases ranging from office and school supplies, computer products, and office furniture to industrial supplies.
Hyland cites the existing contract under Los Angeles County’s office and school supply program as a prime example of savings. He says that Fairfax County used this contract to save more than $1.6 million in FY2006 on these supplies, which combined with significant savings from other alliance contracts allowed the county to fund other vital services without having to ask for additional taxpayer assistance.
Nancy Locke, purchasing manager, Seattle, WA, says the city has taken full advantage of the number of offerings through U.S. Communities, including office supplies, technology solutions, janitorial supplies, maintenance and repair supplies, and playground equipment. She estimates total savings at more than $350,000 in 2006. Additionally, the city of Seattle was able to piggyback on contracts and free staff to work on other solicitations for the city.
Darren Muci, director of operations, Wichita Public Schools, says that using the expertise of the school team members of U.S. Communities has enabled his system to build significant savings and improvements in school product offerings.
Hyland says the soft dollar savings are as significant as the hard dollar savings. He again cites the Los Angeles County school supply contract as an example. He notes that there is no longer a need to warehouse office and school supplies because the Los Angeles County contract requires “just-in-time” delivery to work sites. Also, the county no longer has to spend money on the bidding process because Los Angeles County incurred those costs on behalf of all users of the program.
According to the U.S. Communities, the primary advantages of the purchasing alliance are as follows:
–Competitively solicited contracts by a lead public agency;
–Most favorable public agency pricing;
–No cost to participate;
–Nationally sponsored by leading associations and purchasing organizations;
–Broad range of high quality products;
–Aggregates purchasing power of public agencies nationwide; and
–Managed by public purchasing professionals.