City OKs Reforms in Purchasing That Could Save Millions a Year
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The Los Angeles City Council on Tuesday approved comprehensive procurement system reforms that a consultant estimated could save millions of dollars a year.
“This will save the city an enormous amount of money, and we have to proceed immediately,” said Councilman Joel Wachs, chairman of the Governmental Efficiency Committee.
The Wachs-sponsored reforms will produce a one-time savings of $30 million and annual savings of $56.4 million, according to Deloitte & Touche, the accounting firm that helped develop the proposal.
The council accepted recommendations to consolidate purchasing contracts, accounts payable offices and 85 warehouses spread among various departments and bureaus.
The consolidations are expected to lower purchase prices and overhead costs. Combining purchasing contracts would allow the city to use its buying power as leverage in negotiating with vendors and avoid duplication. For instance, the General Services Department, the city’s main procurement arm, has 77 contracts to provide various agencies with janitorial supplies.
Deloitte & Touche also recommended using a contract set-aside program for minority- and women-owned businesses to aid their long-term development.
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