Procurement That Works: Drivers, Trends, and Innovations
Procure: To obtain by some effort or means; acquire – The New International Webster’s Collegiate Dictionary
Park and recreation agencies play myriad intimate and highly visible roles: They are social service providers, local program and event developers, community engagement leaders, and much more. While the definition of procurement is a simple one, the act of procurement as it applies to the industry is as multi-faceted as the roles agencies play. Moreover, the world of agency purchasing is one where ethics and regulations must converge soundly with efficiency and quality—and where the bottom line is often buried beneath a layer of grey.
Procurement methodologies differ across the U.S., but most agencies share a common outlook. They endeavor to balance long- and short-term needs and finances, preserve resources, and adopt efficient business models to ensure healthy futures for the agencies and their communities.
Even as the U.S. economy moves slowly toward recovery, government bodies have been forced to seek a new equilibrium. According to the National League of Cities’ report, “City Fiscal Conditions in 2011,” 57 percent of cities reported they were less able to meet fiscal needs in 2011 than in 2010. In “Coping With the New Normal: An Economic Status Survey of Counties,” published by the National Association of Counties in October 2011, only 35 percent of respondents reported adopting balanced budgets in the current fiscal year with no anticipated shortfalls. Despite belief by economic analysts that the recession is over, communities continue to make difficult, long-term budget decisions to get through the current fiscal year.
As park and recreation agencies move forward under “the new normal,” they understand finding a balance is imperative in an industry where services are intertwined with community health and stability. “The greatest challenge is to provide and maintain the same excellent level and quality of services for which people developed an appetite before the recession,” says Michael Meadors, executive director of Johnson County, Kansas, Park and Recreation District. “Now more than ever, the dependence on some of those services for families struggling financially may be at its highest.”
In order to be more efficient and maintain quality, agencies are exploring the benefits of decentralized purchasing.
“Cheapest isn’t always best, ” says Michele Potter, director of Gaithersburg, Maryland, Parks, Recreation and Culture, which takes into account everything from the stitching of balls to the durability of equipment when making purchasing decisions. Potter says that while cost is a significant factor—for example, Gaithersburg buys coffee supplies at a local discount shopping warehouse despite its general policy of centralized office supply purchasing—value is also an important consideration. “We need to be fiduciary in our responsibility with taxpayer money, and get the best price for the best quality,” she states.
More agencies are also making use of Procurement Cards (P-Cards), which, according to the National Association of Purchasing Card Professionals website, can result in efficiency savings of 55 to 80 percent. St. Petersburg, Florida, Parks and Recreation Superintendent Michael Jefferis notes a progressive use of P-Cards in his city, even for part-time employees. “We get a rebate on P-Card transactions from the bank, and it cuts down on paperwork and back office processing,” Jefferis says.
Public agencies are using software solutions and standardized support structures for procurement, with benefits such as administrative efficiency, improved record-keeping, spend visibility, and comprehensive vendor management. St. Petersburg, Florida, takes advantage of Oracle iProcurement and iSupplier software, as well as the NIGP national coding system to identify vendors and request bids.
In Johnson County, Kansas, there is an aggressive transition toward a completely electronic payroll system, from the full-time employee to the seasonal worker. “It’s an efficiencies gain,” says Meadors. “The primary drivers are the staff time necessary to print, sort, and stuff checks, and the postage involved.”
The cost of procurement software can be a prohibitive factor for agencies, but Brent Maas, director of marketing for the National Institute of Governmental Purchasing (NIGP), believes this will start to change in the next two or three years. “In the early 2000s, there was a good amount of government adoption of e-procurement,” Maas says. “By the time the recession hit, many agencies that had not yet adopted e-procurement solutions were no longer in the position to do so…but as governments stabilize and the market is saturated with technology solutions, the trend should continue.”
Contracting and Vendor Relationships
Mark McHenry, director of Kansas City, Missouri, Parks and Recreation says his agency was a trendsetter for contracting in the 1990s and continues to look to the private sector when appropriate, as budgets have tightened in the past five years. “You can get the same value at a lower price, with less overhead,” McHenry says. He does, however, like to maintain a balance between the work implemented by his own crews and the private sector to ensure friendly competition. He states, “Our folks will perform at a higher level if they have to compete…and the contractors are sent a message that your crew can handle it.”
For Don Decker, parks director for the planned community of Weston, Florida, contracts are used for all the city’s services, including its recreation programs and maintenance of its 14 parks. “In our scope of services, we will lay out in pretty painful detail what is required…how many acres contractors are responsible for, the program schedules…how many times a month to cut grass…it’s all very defined and deliberate.”
Decker says his county’s ethics rules are changing, and he is curious to see how this will affect vendor relationships. “It is incumbent on me to be open and honest, and make sure all the vendors know the new ground rules as quickly as possible…to err on the side of caution,” adds Decker.
Drivers and Trends
Piggybacking and Cooperative Contracts
Agencies are taking advantage of the cost-saving benefits and reduced administrative work of utilizing contracts already established by other agencies through the bidding process, a practice commonly known as piggybacking.
Vancouver-Clark (Washington) Parks and Recreation constructed a $9-million multi-use sports complex and picked up on a public bid through the State of Texas for its artificial turf. The agency regularly explores opportunities for cooperative purchasing with other government bodies, including a sizeable school district cooperative in the county. “We really try to explore and get creative at finding what we want, at the very best cost,” says Director Pete Mayer.
Maas notes a specific, upward trend toward national cooperatives. He notes the establishment of entities such as U.S. Communities and the National Joint Powers Alliance, which bring together tens of thousands of public agencies. “National cooperatives are developed with an understanding that there may be thousands of potential users. The suppliers know that, and they can shape pricing accordingly. Everybody wins,” Maas states.
Community committees and charrettes are used frequently to ensure the best possible fit for amenities and programs. “Projects are extremely successful because of the input of citizens,” Potter says. Gaithersburg, Maryland, draws from community input for many initiatives; for example, citizens have helped choose and coordinate 18 art installations in developing areas through Gaithersburg’s Art in Public Places program.
Vancouver-Clark goes through an extensive outreach process for playground development, meeting with citizens and businesses, presenting design proposals, and implementing a voting process—prior to sending RFPs. “It saves us money and results in playgrounds that reflect their unique communities,” says Elizabeth Jordan, capital projects manager. She adds that the process also helps engage the area’s active neighborhood associations, stating, “If there is something they want above and beyond, they can raise funds for initial or future phases of development.”
In some cases, procurement supports local economic activity. For bids and RFPs, agencies may offer first rights of refusal to local companies, provide extra points and tax incentives for Small Business Enterprises (SBEs), or, in the case of Johnson County, shape bid specs. “We calculate in things like convenience of delivery and serviceability,” says Meadors. “We are legally bound by certain regulations and laws, but where we can build it [specs] into the contract, we do.”
Green Purchasing and Sustainability
Green procurement continues to influence and challenge park and recreation professionals, who understand the benefits and cost savings, but struggle at times to justify the costs in the short term. However, as the public embraces the green movement, departments are finding ways to forge ahead.
McHenry notes that Kansas City has a system where any building over 5,000 square feet is developed with the baseline goal of a Gold-level LEED (Leadership in Energy and Environmental Design) certification through the U.S. Green Building Council. Additionally, his department is participating in the development of a 150-block Green Impact Zone in Kansas City, which will integrate sustainable building methods and green infrastructure.
As the first green city in Florida, St. Petersburg is helping lead the way for sustainability, with a committee that evaluates and tests greening equipment, and policies requiring the purchasing of environmentally friendly products. “We get it,” says Jefferis. “The pendulum has not swung so far that we are able to pay five times as much, but we always encourage green buying when it makes fiscal sense, and when it works. It has become who we are.”