In this era of exceptionally tight budgets, many state leaders are taking a close look at how they purchase goods and services, and are often discovering ancient procurement practices that wouldn't pass muster in any successful business. Delaware, Virginia and Illinois are among the states that have implemented bulk purchasing systems that consolidate state agency buying to achieve savings through economies of scale. And North Carolina has been a pioneer in online "reverse auctions" that lower prices for goods and services through real-time bidding.
When Ed Rendell became governor of Pennsylvania in 2003, he asked his new secretary of General Services, former Bethlehem Mayor Don Cunningham, to make procurement reform a high priority. With 15 separate state agencies conducting their own purchases, Cunningham was quickly able to show significant taxpayer savings in three major areas, personal computers ($19.1 million in savings), office supplies ($9.65 million in savings), and computer maintenance ($4.2 million in savings). He utilized online reverse auctions to drive down bid prices in the first two categories. On a percentage basis, the savings from consolidated purchasing were even more dramatic, with computer costs reduced more than 40 percent, computer maintenance costs pared by 59 percent, and office supply costs dropping more than 80 percent. This year alone, Cunningham plans to reform state purchasing in 20 areas, generating $100 million in savings, with another round on tap for 2005.
Sounds like good, efficient government, doesn't it? But in Pennsylvania, the GOP -- the party that always likes to brag about its commitment to leaner and more business-like government -- is trying to stop the Rendell-Cunningham procurement reform initiative. On March 31, perhaps anticipating April Fool's Day, the Republican-controlled state Senate, on a party-line vote, sought to bring procurement reform to a screeching halt, or at least a slow roll. Worse yet for the image of the anti-Big Government GOP, the measure passed by Republican senators would create a whole host of new regulatory hoops for Cunningham's agency to jump through before modifying the old, expensive purchasing system.
Rendell made it clear he would veto the measure if it gets through both chambers of the legislature. And it's clear the Republican gambit -- based on the threadbare argument that small businesses would have trouble competing for bigger contracts -- didn't pass the smell test of public opinion. As Rendell has noted: "The state is not the employer of last resort, and it shouldn't be the purchaser of last resort." And as the Pittsburgh Post-Gazette pointed out in an editorial: "If government is to be run like a business, a favorite conservative mantra, then government should seek the best prices it can for the taxpayer's dollar. And that's what the Rendell administration is trying to do. ... It's ironic that the vocal opponents to the state's volume purchasing see excess public jobs as expendable, but not excess public contracts."
Waste is not a legitimate small business development tool, and taxpayers should not be asked to subsidize inefficiency. If Pennsylvania Republicans persist in championing dumb procurement practices, they will richly earn a collective dunce cap.
