Maximize dollars with best-value purchasing contracts
School district officials might hope that school funding could improve in a few years due to Texas District Judge John Dietz’s recent ruling that the state’s school funding is unconstitutional. But for now, funding remains tight and limited for the 2014-15 school year, challenging school districts to be smart and efficient while following school board policies and the government code that dictate how to legally spend public funds. Since districts spend about 80 percent on salaries, the remainder of the budget has to be maximized, making the purchasing function critically important.
Purchasing consultant Mark Rogers said when he began working in a school district, purchasing law was just a paragraph or two. In his presentation at a recent School Finance Council meeting at Harris County Department of Education, Rogers said he had the purchasing statutes for independent schools districts and community colleges memorized in 1974. Today the purchasing statutes for ISDs and community colleges are spread out in the education code, the local government code and the government code.
Effective Purchasing Tools
But with procurement best practices, school districts can avert common problems in the purchasing office. One of the tools Rogers advocates using is cooperative purchasing.
"Everybody benefits," said Rogers. “It doesn't matter how big or how small you are, you will get some benefit from cooperative purchasing."
Rogers says districts using cooperative purchasing contracts may save money, and they definitely save time. Using a cooperative purchasing contract can help you “get things done quickly,” said Rogers. “It can really save your day.”
Choice Partners, the purchasing cooperative of Harris County Department of Education, is one of the oldest cooperatives in Texas. From its beginning as the HCDE Purchasing Cooperative in the 1960s, the cooperative served school districts in the greater Houston area. Today, there are benefits for school districts in any location to use the contracts and save time and money.
Rogers advises purchasing offices to look at the quality of the contracts and the quality of the product or service. Sometimes people assume if you bought it on competitive bid basis, you bought an inferior product, he said.
“Avoid the low-bid syndrome,” said Rogers. “We want to buy good quality.”
He advises thinking about the life-cycle of the product to ensure that significant factors other than acquisition costs are considered in making the purchasing decision.
Review co-op contracts
Choice Partners publicizes a list of things to look for to ensure districts are accessing quality, valid, legal contracts when using a purchasing cooperative.
· Are the contracts procured under current law?
· Is there proof that the proposals were evaluated? Can you get the evaluation tabulation?
· Are the contracts offering a quality, best value product or service or is it low bid of a low-quality item?
· Does the co-op require an interlocal agreement according to Texas Government Code 791?
· Was the contract awarded by a governmental entity as required by Texas Government Code 791?
· If the co-op offers facilities services contracts for such things as maintenance, renovations or repair, were these contracts procured through Job Order Contracting as required by Texas Government Code 2269?
Other factors include any added value the cooperative provides. Does the purchasing cooperative audit the contracts for compliance?
Do they offer HUB or MWBE contracts? Do their evaluations include weights for HUB or MWBE status? Are the HUB contracts clearly designated on their website? Does the cooperative’s government entity follow what is known as the “gold standard” by using its own contracts?
Other best practices recommended by Rogers include:
· Operate with a code of ethics remembering that any behavior that could appear unethical needs to be avoided;
· Cross train staff so at least two people can perform every task;
· Recognize employees for exceptional performance;
· Hold pre-bid conferences, but don’t make them mandatory, which could severely restrict competition;
· Keep contract information readily available for staff on an up-to-date website;
· Network; and
· Don’t reinvent the wheel.
“I don't care how much expertise you have,” said Rogers. “If you start from scratch, you will almost certainly omit something or find something you could have done better if you had started with somebody else's wheel.”
For more information on Choice Partners cooperative, go to www.ChoicePartners.org. School districts can download the interlocal contract to become a member at www.ChoicePartners.org/membership.