Contracts – Purchasing
The Purchasing Division of Kern County General Services manages 265 Price Agreements. Carol Cox, Purchasing Manager for the County, defined the workload requirements for negotiating and executing agreements. Through her process analysis, it was determined that shorter agreement terms require staff to complete the competitive bidding process more often. Taking it a step further, offering extensions and longer agreements could be a vital negotiating tool to receive discounted prices. By offering vendors the security of a longer agreement, vendors might be willing to reduce their prices. Carol’s hypothesis came to fruition. Not only was the burdensome task of managing the competitive bidding process reduced, but vendors welcomed the opportunity to reduce their price in exchange for extensions and longer agreements. The process is now customary when communicating to vendors about our intent to extend in exchange for cost reductions.
WHY IS IT IMPORTANT?
The process improvement of reducing costs associated with competitively bid Price Agreement provides real savings to the taxpayer. It also delivers a shared benefit by County staff and vendors, many of which are local businesses.
Direct savings from August 2017 to February 2018: $2,107,613
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