Guest Column: Public Works Procurement: Moving beyond transactional relationships toward partnerships

Public works

Moving beyond transactional relationships toward partnerships

Tammy Rimes | Guest columnist Executive Director of National Cooperative Procurement Partners

Public procurement of the past was focused primarily on one thing—the lowest price. However, the low bid is not always the best choice, and best value has become the new mantra. While price is still a key consideration under the best value umbrella, other features can be considered, such as quality of the product, warranties, sustainability, industry knowledge and customer service. Taking it even further, government/ supplier relationships are moving from a transactional to more of a partnership. And the reasons are justified.

As government teams know their business, it is important to understand that suppliers know their business, too. Partnering with contracted vendors can bring the full value of their experience, industry knowledge and resources to the table, in addition to the actual delivered product or service. Under this contractual relationship, there is an opportunity to develop a partnership to bring greater value to support the agency’s mission and goals.

Bringing expertise and consulting support

The School Board of Sarasota County facilities maintenance department, located in Florida, has a twofold mission of maintaining a productive and safe environment for its 5,000 employees and 43,000 students while conducting its work as efficiently as possible. With more than 50 educational sites and five maintenance facilities spread over multiple geographic zones, this is no small feat. It requires daily communication with principals and custodians, careful planning to optimize labor resources and a well-orchestrated supply chain.

In the past, individual facility managers were responsible for purchasing—a decentralized, low-bid process that led to overbuying, excessive travel time for technicians and a lack of engagement from nonstrategic suppliers. To become more efficient by eliminating paperwork and “windshield” time for technicians driving from site to site, SBSC made a strategic decision to partner with Fastenal to change the way it was managing its warehouse inventory and ordering process. By consolidating its maintenance and operational spend onto a single contract, SBSC leveraged better pricing by taking advantage of volume discounts. By having two full-time Fastenal employees managing $150,000 of inventory, the SBSC maintenance team could step away from inventory management and focus more directly on repairs. Using vending machines and web orders tied directly to the work order system allows every ordered product to be tracked to a specific project.

Another way that SBSC leveraged the partnership was to consult with Fastenal’s regional safety specialist to help drive Occupational Safety and Health Administration compliance. A prime example, safety specialists conducted an inspection of more than 300 ladders throughout the county. According to Steve Clark, who serves as SBSC’s one-man occupational safety resource, “In three days, the Fastenal safety specialists inspected hundreds of ladders as part of our partnership. We couldn’t have accomplished on our own what Fastenal did in the short turnaround time and with the expert effectiveness they brought to us.”

Jody Dumas, executive director of Facilities Planning and Construction, stated, “Community members are always asking us to run the school district like a business. Well, we are running it like a business. We focus on what we do best, and we bring in partners like Fastenal to do what they do best—efficiently distributing parts and supplies to make the repairs at a lower cost.”

Assistance with revenue generation

While procurement oversees contract expenditures, sometimes there are opportunities to bring in revenues. TriState HVAC, a Daikin Applied independent manufacturer’s representative, often shares its expertise and understanding of available energy and/or tax credits with its clients.

Ed Ciechon, mechanical systems integrator for TriState HVAC noted partnering with a supplier who has insights into tax credits can bring added revenues to strapped government coffers.

According to Ciechon, “Utilizing state and federal rebates with incentives helps to realize a cost reduction while maximizing energy efficiency. It is an absolute winning proposition.”

Located in New Jersey, the Cumberland Regional School District Board is a comprehensive regional public high school district serving students in ninth through 12th grades within seven communities in Cumberland County. Cumberland Regional High School was ready to replace its 650-ton water cooled centrifugal chiller and associated cooling tower. In addition, the facilities department wanted to eliminate the added maintenance and freeze protection measures of the existing water cooling tower.

By partnering with TriState HVAC, through an already-solicited OMNIA Partners contract, a proposal was received for air conditioning to serve the entire high school. By vetting and selecting a cooperative contract, the district was able to get into the manufacturing schedule before the typical spring order rush, saving almost eight to 10 weeks over the traditional plan and specification request for proposals process. The proposed premium efficiency variable speed Daikin applied air cooled chillers, rather than water cooled, provided a more energy-efficient system, lowered ongoing maintenance and qualified the purchase for a New Jersey Clean Energy Rebate.

The end result? A rebate check payable to the district, which was basically equivalent to receiving a free chiller. Upon receipt, Bruce D. Harbinson, school business administrator, exclaimed, “Our NJ Clean Energy check has arrived for $380,200.” He further shared his appreciation for the assistance: “We want to thank you for all you’ve done for our district in making this possible, in addition to the $76,000 our team got back for LED lighting.”

Emergency repairs are streamlined

The 2020 California wildfire season was characterized as record-setting, with devastation greater than previous years in modern history. Monterey County, Calif., experienced the life-altering flames firsthand, as the fires spread near Carmel Valley and Dolan Canyon in mid-August. In addition to the destruction of structures and thousands of acres of land by the raging fires, roads and drainage systems were badly damaged by firefighting By consolidating its maintenance and operational spend onto a single contract, the School Board of Sarasota County in Florida leveraged better pricing by taking advantage of volume discounts. By having two full-time Fastenal employees managing $150,000 of inventory, the SBSC maintenance team could step away from inventory management and focus more directly on repairs. (Photo provided)

equipment. Monterey County officials turned to their Gordian Job Order Contracting program to clear and repair residential roads as quickly as possible. Crews began working on the extensive repairs within two weeks, allowing residents of Carmel Valley and its surrounding communities to safely traverse Monterey County once again. The repairs included mudslide prevention tactics to help ease concerns for public safety as seasonal rains returned to the area.

JOC is an indefinite delivery indefinite quantity construction delivery method that allows projects to be completed through an already competitively awarded contract. This single-bid process enables projects to start faster and creates partnerships between project owners and awarded contractors. Rather than the traditional bid and award public works process, this contracting method allows for more problem-solving conversations on how to approach a project, with the added benefit of using local contractors to complete the work.

Expertise during emergencies

As COVID-19 vaccines became available earlier this year, states were mandated to roll out vaccination plans with accessible sites for residents. A Midwest state’s Emergency Management Agency, working in conjunction with the National Guard, took the lead for its jurisdiction. As the vaccination process was anticipated to result in long lines, with mandated wait periods after the shot was given, it became apparent that these temporary sites needed to have adequate accommodations. As a result, the state reached out to United Rentals to help it address the issue of plastics—otherwise known as port-a-potties. Under an existing Sourcewell cooperative contract, the state and supplier met and established a one-stop shop for all incoming requests. Once the request is received, then United Rentals coordinates to identify the nearest available plastics to deliver and set up prior to the site opening. Sites can be set up and taken down within a day or stay up for several weeks.

One of the initial challenges was finding adequate products across all jurisdictions. Rather than the state having to take on this coordination effort, United Rentals reached out to all suppliers across the state who could assist and leverage local vendors who were knowledgeable about their territories. Having the supplier be the main coordination conduit for this particular task allowed the state to work on the other issues at hand. Leveraging supplier resources is often necessary during a crisis.

Bill Caplinger Jr., strategic accounts manager for United Rentals, stated, “We knew there was an immediate need and had the

resources ready to serve that need. Creating a one-stop shop where the state places a request, and then we make it happen, has been a successful model.”

After the emergency, many agencies seek assistance or reimbursements from FEMA. This time-intensive process is filled with specific rules and regulations that must be followed to the letter—or else the request can be denied. Partnering with an expert can lend the insight and knowledge often needed during this once-in-a-lifetime occurrence for many government teams.

According to Dr. Kim Abrego, founder and president of Disaster Recovery Services LLC, “Working with subject matter experts who live and breathe disaster recovery can help bring order and direction to a stressful situation. Quick disaster response without an in-depth understanding of the funding rules and regulations can create expensive procurement and contracting compliance issues, which are among some of the largest financial risks to agencies following a disaster event. Including experts as part of your team can help with effective disaster response while protecting recovery funding opportunities in the long run.”

Combine financing help with the ultimate purchase

King County is the most populous county in Washington State, serving a community of over 2.2 million residents. For King County Water District 90, the problem was simple—it needed to purchase a piece of heavy equipment for excavation during the height of the COVID pandemic. Due to social distancing requirements, the agency conducted an online walkaround of the equipment through a demo with Sewer Equipment. The equipment purchase through a Sourcewell contract was also accompanied by financing from National Cooperative Leasing. The combined financing was largely due to the water district’s desire to conserve capital due to budget uncertainty because of the pandemic. Since the solicitation process was already done, the procurement process was streamlined and allowed a nearly guaranteed immediate delivery due to the dealer’s — SWS Equipment—unique stocking program.

After discussions with the supplier, the water district ultimately purchased a RAMVAC HX-12 hydroexcavator by Sewer Equipment. These trucks allow the ability to safely dig King County Water District 90 needed to purchase a piece of heavy equipment and found what it was looking for through a Sourcewell contract, which was also accompanied by financing from National Cooperative Leasing. (Photo provided)

around sensitive utilities—like gas services, electrical services, water lines and fiber optic lines—without risking damage to the utility or danger to their operators. In hydro excavation, the equipment literally pressure washes the soil, vacuuming it up simultaneously as opposed to using mechanical means such as backhoes.

Joshua Drummond, operations manager, added, “We found this way of excavation can be a safer method than digging around utilities.”

Leveraging relationships through cooperative contracts

The idea is a simple one—piggybacking on an already-established contract to leverage your organizational spend along with all the agencies who use the same contract. Combining greater spend usually drives more advantageous pricing for all. Time savings is also realized, as the typically long solicitation process has already been done.

As government teams have worked from home or virtual environments, the use of cooperative contracts has grown over the past year. Jeff Drury, senior director of the Choice Partners cooperative organization, has observed an increase in the use of the co-op’s contracts, particularly for supplies and services related to COVID-19. Out of this need, the realization of suppliers as partners is growing among government teams.

“Our vendors were quick to update their offerings in an effort to meet the immediate needs of government agencies — those offerings included PPE (personal protective equipment), cleaning chemicals and room fixtures to accommodate the CDC requirements for distancing and health safety,” Drury said. “This adjustment was a win-win for suppliers and those agencies needing help.”

Tammy Rimes, MPA, is a keynote speaker, procurement consultant and executive director of the National Cooperative Procurement Partners, or NCPP. She served as former purchasing agent for the city of San Diego and implemented its first environmentally preferred purchasing program. She served during one of Southern California’s largest emergencies—the 2007 Witch Creek Fires, which raged for 17 days and destroyed over 2,000 homes and structures. Free educational materials on emergency preparedness, cooperative contracts and a free webinar series are available at www.NCPPAssociation.org.