Idea #2 – Group Purchasing

Report Status: Fully Reviewed

Researched by: Paul Rickter

Original Idea as Submitted

Determine whether there are additional group purchasing opportunities such as State and regional supply contracts that can provide additional cost savings.

Other ideas included in this report

  • 4 - Seek insurance discounts by bidding with other towns

  • 13 - Centralize supplies (school, office, janitorial, etc.), monitor usage, and control "backdoor" losses

  • 18 - Put insurance out to bid. Have schools pay for their share of insurance and defend their own claims

  • 134 - Legal - Due to increased use of insurance to cover legal fees reduce budget item. Implement existing plan to put legal services out to bid. Seek discount for purchasing services with other towns.

  • 180 - Partner with other towns to lower costs through large purchases of commodities (heating oil, salt, sand, etc.)

  • 181 - Hazardous waste disposal consortium with Lexington and other towns

  • 365 - Insurance - Put out to bid. Seek discount for purchasing with other towns.

  • 367 - Purchasing Cards for Gasoline with agreements with local suppliers, in place of fuel tanks

  • 374 - Explore opportunities to expand our regional purchasing with other municipalities

Idea intent

This idea and the other ideas included in this report all revolve around the central idea of striving for ways to save money by purchasing items at the lowest possible cost. Often the strategy for achieving lower costs involves purchasing items in bulk in coordination with other municipalities or by participating in state or regional purchasing programs. By joining with others there is a good chance for getting the best price possible on needed purchases.

Weighted Final Score: 43
(Financial Impact: 3, Operational Impact: 2, Time Scale: 2, Ease of Implementation: 3)

Background Information

Belmont already saves money by participating in some multi-municipality purchasing programs. These programs include:

  • Purchasing gas and diesel fuel in bulk with 11 other municipalities in a program coordinated by the Town of Brookline

  • Purchasing road salt in bulk with 10 other municipalities in a program coordinated by the City of Newton

  • Participating with 13 to 15 other municipalities in regionalized household hazardous waste events in a program coordinated by the Town of Lexington

  • Participating in the Metropolitan Area Planning Council's (MAPC) collective purchasing programs for purchasing heavy equipment, such as fire apparatus, at prices negotiated by the MAPC.

  • Participating in the Minuteman Library Network by the Belmont Public Library, which gives the library access to Sierra software. This software manages most aspects of day-to-day library operations, including acquisition, cataloging, circulation, and serials management.

Massachusetts state law sets requirements for how high price purchasing by municipalities is done. For example, for any purchase between $10,000 and $50,000, three quotes must be obtained. Over $50,000, a process involving sealed bids is required.

Because of the complexity of purchasing law and to pursue savings in purchasing of goods and services, several comparable municipalities in our area, including Lexington, Arlington, and Watertown, have dedicated purchasing agents or departments.

Recommendations

  • All Town departments should continue pursuing all available opportunities for purchasing items in bulk to realize budget savings.

  • All Town departments should pursue additional opportunities for purchasing items jointly with other towns as they appear. The Town Administrator should follow the recommendation of Idea #108 to discover new opportunities.

  • Town Administration should strongly consider creating a purchasing agent position. This position would ensure that we are realizing all possible savings and making purchases in accordance with State law. Currently, the town staff member with the best knowledge about purchasing law is the Assistant Town Accountant, but having a dedicated purchasing agent should have financial advantages that exceed the salary and benefits of the new staff position. This purchasing agent could also network with other purchasing agents in neighboring communities, helping to uncover ways to save money by purchasing items collectively.

Further Reading

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