Better Buys on City Supplies : Finances: Wachs says purchasing agents could save millions just by going to retail stores. But they are hampered by an oversupply of red tape.

Don’t hold a seat on “The Price Is Right” for those Los Angeles city purchasing agents.

City Councilman Joel Wachs, announcing a review of the way the city buys supplies, said his staff found better deals than the city gets just by going across the street from City Hall to an office supply store.

Some examples: Legal pads that cost taxpayers $1.80 each, went for only 20 cents retail. A box of computer diskettes set them back $24.99, compared to $6.59 that the man on the street would pay. And the city paid $7.29, instead of $1.99, for a ream of white copier paper.

Wachs said he believes the city can cut as much as 10%, or $70 million, from its $700 million in annual purchases. “This city has got to go on a diet and this is the place to start,” Wachs said, amid stacks of copier paper, computer disks, glue sticks and file folders.

Other city officials agreed with Wachs that a proliferation of regulations designed to prevent fraud, and to promote other goals, has driven up costs and caused delays.

But they were unclear on how much savings can be achieved. A survey last year by the city controller’s office showed much smaller price discrepancies than reported by Wachs. “It’s probably a much smaller universe, in terms of savings, that we are talking about, but it’s still worthwhile,” said one official familiar with city purchasing procedures, who asked not to be identified.

Officials in the controller’s office, the city administrative office and the Department of General Services--which oversee most purchasing--agreed that a review is a good idea. Hearings are scheduled to begin April 27 before the Governmental Efficiency Committee, which Wachs chairs.

The councilman’s survey focused on purchases made through several contract companies for special orders. The city acquires most of its supplies through bulk orders that are generally cheaper than special orders. But many city bureaucrats turn to the contractors and their higher prices because it can take up to three weeks to get the bulk goods that are sitting in city warehouses, said Greg Nelson, Wachs’ chief deputy.

Wachs said that the city’s purchasing agents are further hamstrung by a Byzantine set of regulations that were put in place to prevent fraud and favoritism.

Problems also arise because it can take three months or more for the Department of General Services to verify the delivery of goods. That, in turn, delays payments and disqualifies the city from receiving discounts that are contingent on prompt payment, said Michael J. Inouye, chief administrative analyst.

In other cases, the City Council has intentionally volunteered to pay higher prices to achieve certain policy goals. For instance, it offers a bidding preference in purchases of less than $25,000 to companies based in Los Angeles County. The incentive is designed to promote local businesses. But the city can pay as much as 5% more to accomplish that goal.

Other city laws require that companies using recycled materials be given preference over those that do not, and that firms that include minorities and women be chosen over those that are run by white men--although the latter program has been at least temporarily invalidated by a state appellate court.

Controller Rick Tuttle’s survey last year found that, on routinely purchased items, the city fared somewhat better--sometimes besting retail prices but sometimes not, despite its ability to buy in bulk. Wachs said the city’s system has become so complex, and payments are so slow, that many vendors no longer bid for the business.

He said that city purchasing agents and others cannot be blamed because they have been saddled with the regulations, many of which can only be undone by the City Council.

Wachs said several possible solutions will be considered by his committee, including: reducing scrutiny of purchases under $1,000, which now take nearly half of city buyers’ time; raising the level of permissible petty cash purchases from $100 to $200 or more; acquiring city credit cards that allow employees to make purchases when they can find a good deal; improving the computer system used to make and track purchases; consolidating most purchases in one department, instead of the five departments that now handle them.

Price Comparisons Los Angeles City Councilman Joel Wachs’ staff conducted a survey of prices the city pays for an array of specially ordered office supplies. The survey revealed that the city often pays many times more for its supplies than prices offered at discount stores.

MATERIALS CITY PAID RETAIL PRICE Copy paper, letter size $7.29 $1.99 Yellow writing tablet .66 .15 Expanding filing envelope 3.35 1.63 Box of 10 glue sticks 8.90 2.80 Box of computer disks 24.45 6.59 Box of Manila folders 14.99 3.99