Springfield Saves Money by Central Purchasing

HUGE DOLLAR SAVINGS through strict controls, volume purchasing and elimination of deficit spending were listed as major accomplishments of the City's Central Purchasing Department in a three year progress report released recently by City Purchasing Agent Joseph F. Gerzin.

The Central Purchasing Department was created by the present City Council immediately after taking office in April, 1955.

In releasing the report, Gerzin cited four "of many examples available" of dollar saving benefits derived from centralized purchasing. He said that the contract made by the City in September 1955, purchasing a four years' supply of coal on sealed competitive bids resulted in a price averaging 74¢ less per ton than the price the City had paid the previous year. "This will have saved the City at least a half million dollars on the approximate 716,-474 tons of coal the Electric Department will have used by September, 1959," Gerzin said.

The second cited example was the City's purchase in November, 1957, of 1500 parking meters on sealed competitive bids at $40.38 per meter. "In spite of price advances since 1941, this represented the lowest price that the City has ever paid for meters since the first one was installed in 1941," Gerzin said. "The price is approximately $23,000 less than the City would have paid for a similar quantity of meters at the average price charged the City prior to 1957," he added.

The third cited example was the decision, commencing in 1955, to purchase yearly supplies of gasoline for all City departments on sealed competitive bids in lieu of the previous practice allowing each department to purchase small quantities at irregular intervals from varied individual dealers. "The large quantity attracts major oil companies. Presently, in 1958, notwithstanding repeated and frequent price increases since 1954, we now purchase ninety plus octane gasoline for $19.09 per gallon, as against 1954 charges averaging $22.05 per gallon. This saved the City at least $10,750 in the four year term of this administration," he added.

His fourth cited example was the purchase of street marking paint. "During 1954, the average price paid by the City was $4.68 per gallon; but last year a contract based on sealed bids was let for an average of $2.98 per gallon. In four years, this also will amount to a City savings of at least $13,600", Gerzin said.

A few of the many purchases now conducted on volume competitive sealed bidding and inaugurated by the Purchasing Department are Chlordane fly spray, kerosene, police uniforms, mimeograph paper, drinking cups, water meters, electric, meters, sand and gravel, electric current breakers and other electric supplies and athletic equipment.

Gerzin emphasized elimination of deficit spending as an important accomplishment of centralized purchasing. He said, "Except for emergencies, no item or service now is delivered to any department of the City unless a requisition first has cleared through both the Central Purchasing and Finance Departments. This eliminates past practices wherein items were often delivered to a department and put into use before the Finance Department was aware of the purchase and had determined whether funds were available to support such purchases."

"Further savings can be accomplished as the centralized purchasing program expands, buying experiences are evaluated, and arrangements are made for purchasing and storing supplies in larger quantities", Gerzin said.

The report states that during its three year existence the Purchasing Department has complied with virtually all recommendations of the 1953 study made by Griffenhagen and Associates of Chicago, municipal experts.

These recommendations include creation of a specifications committee, standardization of purchasing procedures and contracts, volume purchases at periods of favorable markets, holding out of schedule buying to a minimum, concentration of all purchasing negotiations in one Purchasing Department, retaining the benefit of volume purchasing by arranging for split or staggered deliveries during the year, enforcement of definite rules concerning emergency purchasing, installation of followup systems to insure prompt deliveries, transferring purchasing clerical work from other departments to Purchasing Department, and establishing and maintaining a source record of supplies and materials needed by the City.

The report includes a statistical summary of purchases made by the City during the past three years, and concludes with a recommendation for a central stores receiving and disbursement station and the hiring of a field mechanics report.

Municipal officials interested in this report may obtain a copy by writing to Joseph F. Gerzin, purchasing agent, second floor, City Hall, Springfield, Illinois.

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It appears that window cleaning employees in East Paterson, New Jersey, do an excellent job. In the last few weeks three persons have been cut when they walked through the large glass panels that frame the door of the municipal building. It has been remedied by placing two six foot plants in front of the panels.

Illinois Municipal Review 237 October, 1958