CITYWIDE: “JUST IN TIME” PROCUREMENT CONTRACTS AND EXPANDED USE OF PURCHASE CARDS

6-C
CITYWIDE:’JUST IN TIME’ PROCUREMENT CONTRACTS AND EXPANDED USE OF PURCHASE CARDS
Problem Identification:
The departments studied repeatedly identified an inability to procure materials and supplies as a significant impediment to efficient and effective operations.

Recommended Action:
Expand the use of ‘just in time’ (JIT) contacts and purchase cards to accelerate the procurement process.

Classification:
Cost Savings, Organizational, Service Improvements

Functional/Operational Area:
Citywide, Bureau of Purchasing

Estimated Annual Impact:
Cannot be Estimated

Estimated Implementation Costs:
None

Barriers to Implementation:
None

Projected Implementation:
Ongoing

Next Steps:
City departments should scrutinize their purchasing practices, isolate the most frequently purchased materials and supplies, and work with the Bureau of Purchasing to develop JIT contracts to accelerate the procurement process. Additionally, departments should increase efforts to identify appropriate personnel that should be supplied with purchase cards.

Analysis:
The Finance Department’s Bureau of Purchasing currently has JIT contacts in place for the following items: stationery supplies, lumber, janitorial products, automobile parts, large lamps/tubes (lighting), and electrical supplies. These contracts reduce the time it takes for departments to take receipt of ordered materials and supplies, produce economies of scale by pooling City purchases, and minimize the need for warehousing and storage space because materials and supplies are ordered only on an as-needed basis.

The Finance Department’s Bureau of Purchasing also has put in place a purchase card program where department personnel can be issued VISA cards designed specifically to accelerate the City’s purchasing process. The program, targeted towards accelerating departmental purchases of less than $1,000, enables City personnel to place orders directly with vendors rather than utilizing the City’s more time-intensive purchase order process. The program offers a number of benefits including reducing the number of low value purchase transactions processed by the Bureau of Purchasing as well as facilitating the rapid payment of vendors. Additionally, the program is replete with automated financial control measures that greatly reduce participating departments’ recordkeeping requirements. Despite the many benefits this program has to offer, only 95 purchase cards have been issued Citywide. This is a program that departments should be participating in to a much greater degree.