The findings of a one thousand-page report can save North Carolina $30 million, state officials said.
State agencies will now consolidate their purchases based on a new model for acquiring items developed by the N.C. Department of Administration, said Sam Byassee, state purchasing officer for the DOA. The new policy affects items such as processed foods, office supplies and medical supplies. Gov. Bev Perdue announced the initial implementation of the plan—the Procurement Transformation Project—in a Sept. 9 release.
“Consolidation of individual state purchases will generate larger contracts, which will allow for leveraging to lower the cost per transaction,” Byassee said.
The DOA partnered with Accenture—a management consulting firm—to assess the procurement process in North Carolina and recommend improvements. This process involved a close examination of the state’s purchasing history to determine the relationship between particular vendors and state agencies.
“The rules and regulations for the procurement process have not been updated for the past 20 to 30 years,” Byassee said. “Meanwhile, procurement in the private business has advanced a lot. We thought it was time to update and streamline the process.”
The subsequent report, which has received bipartisan support from the N.C. General Assembly, encompasses best-fit opportunities and a realistic implementation plan that is projected to save the state $30 million, Byassee added.
To avoid any additional expenses in light of the current budget deficit, the DOA plans to implement the new procedures internally rather than hire external vendors. This means that the total implementation process will take two to three years to complete, rather than the originally projected 12 to 18 months, Byassee explained.
“Trying to implement the new procedures ourselves at the same time we’re doing day-to-day work means that there will be more effort on our part,” Byassee said. “But we will move at a pace that will bring success rather than try to fit an artificial deadline that will produce unsatisfactory results.”
The new initiative has insofar cost the state less than $2 million, primarily due to hiring Accenture to develop the assessment and recommendations for the state, he added.
The new purchasing model reinforces Perdue’s dedication to establishing a more efficient government, Perdue’s press secretary Chris Mackey said in an interview.
“Making state government more efficient has been Perdue’s top priority since she entered office in 2010,” Mackey said. “She has worked to collapse some state government departments and encourage government collaboration.”
Perdue’s Executive Order No. 4—Open Book Government for North Carolina—and Executive Order No. 5—Budget Reform and Accountability Commission—provided the policy foundation for the new purchasing model.
North Carolina is estimated to have a budget deficit of approximately $2.6 billion for the 2011-2012 fiscal year, according to a report from the North Carolina Justice Center.
While the Procurement Transformation Project will not solve the budget deficit, it is part of the solution, Byassee said.
“The more efficient we can be with taxpayer money, the better,” Byassee said. “It took several years to get into the current financial situation, and it will take several years to get back out again.”
The streamlining procedures have garnered some criticism from opposing parties. Theodore Hicks, chairman of the Durham County Republican Party, expressed skepticism about the effectiveness of the new initiative in alleviating the state’s budget crisis.
“While I applaud the effort to save the North Carolina taxpayers some money by seeking bulk discounts, it seems to me that we should be far more aggressive in cutting spending than what I have seen from the governor’s office,” Hicks wrote in an email. “You will always save more money by reducing your spending than you will by seeking discounts.”
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