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New purchasing model aims to change the way North Carolina does business
Story Date: 9/12/2011
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Source: PRESS RELEASE, 9/9/11
Gov. Bev Perdue announced today that North Carolina is taking an important step in transforming the way the state purchases goods and services, a move expected to boost efficiencies, foster smart buying and discourage waste.
The Procurement Transformation Project, a summary report of which is available online, is a response to one of Gov. Perdue’s top priorities since taking office: making state government more efficient. The project will create unprecedented collaboration among state agencies, vendors and partners. The agencies will be able to trim costs and realize savings through initiatives such as strategic sourcing.
“State government must be more streamlined and nimble, finding every savings that we can, just as families and businesses across the state are doing,” Gov. Perdue said. “Being smarter and more efficient about how we make purchases is an important step in saving the taxpayers’ money.”
The Procurement Transformation Project takes it direction from Executive Order No. 4, Open Book Government for North Carolina, and Executive Order No. 5, which established the Budget Reform and Accountability Commission. Additionally, it is supported by new procurement legislation that supports good government, and strategic cooperation among the state and its vendors.
For example, instead of multiple research labs or healthcare providers each buying medical supplies and equipment from different vendors, they will work together and leverage the buying power of a larger contract to get a better deal – which in turn helps the state keep a lid on rising costs. Similarly, state agencies will unite to purchase processed foods, office supplies and other goods from vendors that offer better deals to the state, much in the way that households across North Carolina have switched brands or where they shop to reduce expenditures from family grocery budgets.
“Especially with this new flexibility, we are confident that the Procurement Transformation Project will increase accountability, transparency and savings,” said Administration Secretary Moses Carey. “By identifying key areas for improvement and strategies to leverage the state’s considerable buying power, we will maximize our use of limited taxpayer resources.”
The effort to modernize procurement laws received bipartisan support from the General Assembly this year; which is the most significant update to procurement statutes in several years. Legislation sponsored by Sen. Andrew Brock (R-Davie) and Rep. Marilyn Avila (R-Wake), passed unanimously in both Chambers and allows the State to save money while increasing spending transparency for the taxpayer.
The project was coordinated by the Department of Administration (DOA) with Accenture Inc., a contractor that has assisted other states and organizations with similar endeavors. More than 25,000 surveys were sent to vendors and a series of stakeholder meetings were conducted – not only with state agencies but also partners who are not obligated to use the state’s procurement system, but who do so because of the potential advantage to them. This includes the Community College System and local governments and education authorities.
Accenture’s detailed, thousand-page report was based on best practices and leading industry standards. Its findings were further examined by DOA procurement professionals for best-fit opportunities and a realistic implementation plan that will be managed by existing staff, who also remain responsible for ongoing management of the current statewide procurement operation.
In addition to potential significant operational improvements, the report also identifies opportunities through strategic sourcing efforts to potentially save the state $30 million in procurement cost avoidance. DOA’s Procurement Transformation Report may be viewed at http://www.doa.nc.gov/procurement/documents/report.pdf.
The project will be managed by existing procurement staff, which also remain responsible for ongoing management of the current statewide procurement operation. DOA’s Procurement Transformation Report may be viewed at http://www.doa.nc.gov/procurement/documents/report.pdf.
Some aspects of the Procurement Transformation Project have already begun, including a technology upgrade that was necessitated by a software licensing deadline, and approval of legislation that authorized improved contracting flexibility. Later this month, DOA will announce the project’s working groups and meeting schedule, followed by a detailed implementation timeline, and a list of potential savings targets identified through strategic sourcing in January. Details of these and subsequent deliverables will be posted on the Procurement Transformation website, http://www.doa.nc.gov/procurement/.
Additionally, DOA will convene a stakeholders’ conference in early 2012 to continue the collaborative process with state agencies, institutions, campuses, local governments and education authorities, vendors and other partners. Workshops will be provided on the impact of new legislation, strategic sourcing and methods to maximize savings through the new procurement model.
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