Our own Windy City has a bit of an odd approach to contracting and supplier selection (at least historically) that might receive some disapproval from most in the private sector. Knowing the local Alderman (city councilman), parading your employees around City Hall and associated public sector offices in t-shirts that highlight minority certifications to would-be customers, contributing to the campaign of a state representative or former governor -- all of these have historically factored into how suppliers sell and influence public sector workers to make vendor selections. Nope. We're not kidding. This is Chicago, after all.
But the CPO for the public school system (CPS), Sebastien de Longeaux, who joined in March 2012, is out to change things, as we began to highlight in the start of this post. In a recent Chicago Tribune article, he states, "What we're doing is really challenging any price the vendor is telling us." Bringing in a former private sector procurement leader such as de Longeaux is something that is surprising in a public sector environment where the status quo has long been merely tolerated. Yet it looks like having its back up against the budget wall forced CPS to make a bold move. And thank goodness it has.
As the Tribune notes, the city targeted procurement over other budget areas by challenging "vendors' costs by doing research on market prices and renegotiating where they saw a gap between that and what was being paid ... Altogether, $11.5 million was saved in working out better deals with vendors. Another $20 million is expected as new contracts are being negotiated for construction projects, transportation, utilities, food and education supplies. The district has also cut costs by $11 million in its information technology department, including by migrating to a single email system with Google Apps."
The tactics CPS is deploying could come from any private sector handbook. We'll share them in the next post in this series.