Saving States the Sam’s Club Way
By DAVID YARKIN
NYT
Washington
AS any Sam’s Club shopper knows, buying in bulk saves you money. But states and cities have paid too little attention to the costly and inefficient way they buy goods and services. By visiting an office that few of them have likely paid much attention to — central purchasing — governors and mayors could make significant headway in plugging their deficits.
Nearly every state is facing budget problems. A fifth of all states face deficits equal to 20 percent or more of their budgets, topped by Nevada and Illinois at 45 percent. Gov. Andrew M. Cuomo of New York inherited a deficit equal to 17 percent of the budget.
Pennsylvania faced a likewise daunting deficit, of $2 billion, in 2003, when I began managing the state’s procurement operations, responsible for $4 billion in annual spending. To help close it, we borrowed an approach used by businesses: strategic sourcing.
Previously, the state purchasing office would set up a master contract with dozens of suppliers and then allow agencies to buy whatever they wanted from whichever supplier on the list they preferred.
(More here.)
NYT
Washington
AS any Sam’s Club shopper knows, buying in bulk saves you money. But states and cities have paid too little attention to the costly and inefficient way they buy goods and services. By visiting an office that few of them have likely paid much attention to — central purchasing — governors and mayors could make significant headway in plugging their deficits.
Nearly every state is facing budget problems. A fifth of all states face deficits equal to 20 percent or more of their budgets, topped by Nevada and Illinois at 45 percent. Gov. Andrew M. Cuomo of New York inherited a deficit equal to 17 percent of the budget.
Pennsylvania faced a likewise daunting deficit, of $2 billion, in 2003, when I began managing the state’s procurement operations, responsible for $4 billion in annual spending. To help close it, we borrowed an approach used by businesses: strategic sourcing.
Previously, the state purchasing office would set up a master contract with dozens of suppliers and then allow agencies to buy whatever they wanted from whichever supplier on the list they preferred.
(More here.)
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