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Trends and Insights in Public Purchasing: Challenges and Strategies for Efficient Procurement

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warner
10 diapositives · 263 Views · Sep 14, 2014

This article by Dr. Kimball Bullington explores significant trends in public purchasing from 1933 to 2000, focusing on centralization, privatization, and electronic procurement. It highlights the importance of long-term planning in a budget dominated by services and the challenges faced by public purchasing professionals, such as rigid acquisition procedures and lack of expertise. The article also discusses the impact of government purchasing laws, the growing supply base, and the effectiveness of Group Purchasing Organizations in reducing costs. Strategies for optimizing procurement in the public sector are also outlined.

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  1. Public Purchasing Marketing 3860 – Purchasing August 4, 2004 Kimball Bullington, Ph.D. Associate Professor of Operations Management Middle Tennessee State University

  2. Gov’t Purchases 1933-2000 ($B)

  3. Trends in Public Purchasing • Centralization • Privatization or outsourcing • Commercial practices • Government purchasing cards • Contract types • Electronic procurement • Environmental and investment recovery

  4. Characteristics of Public Purchasing • There is a premium on long-term planning, because extra-budget increases are not likely. • A large portion of purchases are handled by non-purchasing professionals. • Savings from purchasing estimated at $108 B over a five year period. • Budget dominated by services (62%)

  5. Characteristics of Public Purchasing • Gov’t purchasing law requires contracts to be awarded to lowest “responsible” and “responsive” bidder. • Budgetary constraints make spot buys difficult. • Supply base growing • Greater support of public service programs (i.e., MWBE)

  6. Characteristics of Public Purchasing • Lack of traffic expertise • Change processes are lengthy • Salary competitive at the lower levels, not competitive at upper levels • Lack of confidentiality • Specifications of supreme importance • Acquisition procedures rigid • Emphasis on bid process

  7. Federal Gov’t Buying Prejudices • Small business • Labor surplus areas • Buy American Act • Environmentally Preferable Purchasing • M/WBE

  8. Types of Contracts Most hospitals and clinics use some sort of Group Purchasing Organization. One such organization, Novation, reports that GPO’s save their clients 10-15% on purchasing a total of $153 billion / year.

  9. Health-Care Purchasing • Firm-Fixed-Price • Cost-Plus-Fixed-Fee • Cost-No-Fee • Cost-Plus-Incentive-Fee

  10. Public Purchasing Marketing 3860 – Purchasing August 4, 2004 Kimball Bullington, Ph.D. Associate Professor of Operations Management Middle Tennessee State University