Building a customer-focused culture

The San Diego County (Calif.) Department of Purchasing and Contracting (DPC) is on a roll. DPC, under the leadership of Jack Pellegrino, Director of Purchasing & Contracting, recently was awarded the NIGP Outstanding Agency Accreditation Achievement Award (OA4) which recognizes agencies that lead the public procurement profession. San Diego is one of 23 counties in the nation that has received this accreditation. The department has also achieved the 2019 NPI Achievement of Excellence in Procurement Award for the 18th consecutive year.

As part of the county’s $6.25 billion budget, procurement represents just over 20 percent of total expenditures. The county procures a variety of goods and services, with significant spending in the areas of health & human services, public safety and civic services. In the 2018-2019 fiscal year alone, the county spent $1.33 billion on procurements of goods and services.

“San Diego County is enormous with massive breadth and needs for different services,” Pellegrino explains. “Our geographic diversity is a characteristic that makes our county unique. The county’s service area covers 4,526 square miles.” The county serves six health & human service regions including public safety (the sheriff and the probation department); a library system with 33 branches and 2 bookmobiles serving over 5 million library visitors last year; the public works department that maintains more than 1,900 miles of roads; and the county’s park system with more than 100 locations, with numerous hiking trails as part of open space preserves.

“Clearly, in order to effectively meet the diverse needs of the county’s 40 departments, DPC’s staff must focus their procurement efforts on each department’s unique requirements and provide them outstanding internal customer service throughout the contracting process,” Pellegrino says. He adds that DPC’s mission is simple: support department’s needs by acquiring what they need, when they need it, competitively at fair and reasonable prices. “This is what we do every day to ensure that we are best serving our residents and spending taxpayers’ money wisely. DPC calls this ‘Mission-Focused Procurement.’”

At the 2019 NIGP Forum, Pellegrino presented a session: “Achieving Excellence: Using Technology and Performance Metrics to Drive Improvement.” He outlined the path to public procurement success. “One step on the path that procurement departments need to take is to assess what is their procurement portfolio, where procurement is positioned in the organization and how they could best contribute to the organization’s overall success.” He adds:  “For any size procurement team, the key to outstanding performance is to determine the following: What is expected of the department/process, How they measure success, and do they have the informational metrics and tools to be effective – and regularly show how they are doing against these performance metrics.”

Over the past several years DPC has introduced procurement metrics and dashboards that are based upon real-time procurement transactions, which are continually reviewed and reported.

One of the county’s procurement objectives is to ensure that awards are made competitively. “Our Board of Supervisors Policy A-87 requires competitive procurement of goods and services, so we established a goal of at least 90 percent of total dollars eligible for competition are awarded through competitive processes. For fiscal year 2018-19 of that $1.22 billion eligible for competition, we competed 89 percent which amounted to $1.09 billion. This level of competition is one of the best in the nation, including federal government agencies,” Pellegrino says.

These types of results are only achievable in organizations of this scale because of the full support of the county departments and the ownership of the entire DPC team, Pellegrino says.  “DPC staffers understand the rules and expectations, and we work closely with each department to meet their needs in a timely and professional manner.  We deliver outstanding mission-focused procurement support on every transaction.”

Pellegrino points out that these types of results can be achieved in any size procurement organization by implementing the following steps:

• Clearly define and communicate your organization’s role, process and expectations for staff (including your key customers).
• Adopt a culture of customer service, transparency, and ownership for results. Ask staff to acknowledge acceptance and support.
• Define your most essential performance metrics – what contributes to the organization’s success. Track and openly report those metrics.
• Be open and frequently seek feedback on results and changes in priorities.
• Be willing to adapt and evolve; never be complacent with your current results. There are always ways to improve.

Pellegrino advises procurement teams to look outwardly to achieve operational efficiencies. “If authorized by local regulations and properly implemented, cooperative agreements can help procurement departments. Proper use of cooperative procurements allows organizations to purchase goods and services on an expedited timeline and often on better-leveraged pricing terms than they otherwise would have been able to accomplish on their own.”

He adds that when an agency uses cooperative purchasing, it eliminates the need for a department to conduct its own solicitation process. “Through established cooperative contracts, governments can get volume discounts as they join with other entities on bulk purchases.” Pellegrino urges public buyers to consult cooperative procurement resources available from NIGP: The Institute for Public Procurement Public Procurement and National Cooperative Procurement Partners (NCPP).

Pellegrino concludes: “Delivering mission-focused- and value-added procurement support is not a destination but a journey. It changes every day as the procurement needs of our internal customers do. There is no better time than today to start providing mission-focused procurement support.”

Michael Keating is senior editor for American City & County. Contact him at michael.keating@informa.com.