Revised City Purchasing Plan May Save Millions Annually

Four years after City Councilman Joel Wachs declared war on $1.80 legal pads, $300 answering machines and $24 computer diskettes, the City Council on Tuesday approved a new purchasing system aimed at saving taxpayers millions of dollars a year.

Wachs, who called the city’s current purchasing system “wasteful and inefficient,” said the new approach will ensure that the city pays the lowest prices for its $800 million to $900 million in purchases every year. The new system was developed by a team of city officials after voters approved changes in the charter three years ago to allow more flexibility in purchasing.

“This has been a long, long battle to transform a system which is . . . a cumbersome, paper-driven system . . . totally obsolete and inefficient,” Wachs said. “It’s just a jungle of paperwork and administration processes.”

Wachs said his morning news conference, which was attended by a single reporter and 14 city officials, exemplified the city’s problems.

“That’s basically what’s wrong with our system,” Wachs said, laughing. “It takes 20 people to screw in a lightbulb.”

The full council unanimously approved the system, part of which now must be approved by the mayor. Noelia Rodriguez, Mayor Richard Riordan’s spokeswoman, said the program is in line with the mayor’s desire for governmental efficiency.

Some council members raised questions, however, about how much money the program will save the city. Wachs said he believes it will be $32 million a year, but others said that figure seemed high.

One reason the savings could be lower, some council members implied, was that three major agencies--the Department of Water and Power and those that run the harbor and the airport--are not required to follow the plan. The DWP has said that it will comply with some of the plan’s provisions, but that it wants to retain its own purchasing power for some specialized equipment.

“Let us not give the impression that this will fix all,” said Councilman Nate Holden, “because it will not.”

But others said the program will go a long way toward making the city more efficient in its purchasing and bill-paying. City officials had said the antiquated buying system frequently left the city delinquent in its bills, reducing any volume discounts it could have received.

“If we can learn how to buy and, more importantly, how to pay our bills on time, I think we will be in great shape,” said Councilman Richard Alatorre.

Under the new system, contracts and accounting will be consolidated under one department, purchasing personnel will be cut by 40%--about 200 positions--and changes will be made to allow for bidding on contracts and to reduce the number of contracts the city signs.

The personnel reductions have been a source of controversy, but they can be achieved through attrition, Wachs said.

Some departments, aside from the DWP, also raised concerns about allowing the General Services Department to handle all purchasing. Fire Department officials, for example, have said they want to continue buying their own equipment.

Still, Wachs said he believes all city departments will become part of the new program, which was initiated after his staff members found that many office supplies could be obtained far more cheaply at retail stores than from the city’s warehouses.

“We found shocking things,” Wachs said. “A yellow pad that cost $1.80 in the city could be bought across the street for 21 cents.”

Under the new system, the General Services Department is expected to consolidate contracts, enabling the city to receive greater volume discounts.

“The single largest savings will be in contracts,” said Jon Mukri, assistant general manager of the General Services Department. “And we will have . . . more flexibility for service and quality.”