Michigan government purchasing scores high in national survey

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Capital News Service
LANSING – Michigan ranked ninth in a recent national survey assessing how well each state government buys stuff.
The report in Governing, a news organization that reports on state and local government, found that Michigan ranked first in performance measures and fourth in how well it administers contracts.
Those are good marks, according to Liz Farmer, author of the study on state procurement.
Government procurement is a process to maximize efficiency in large-scale transactions involving a public agency. It’s important that it’s done well because it’s how the government spends taxpayers’ money, Farmer said.

The researchers looked at 14 measures that included savings, employee engagement and customer satisfaction, said Steve Davis, the risk and analytics manager at Michigan’s Department of Technology, Management and Budget (DTMB) who helped Governing gather the information. “We had a pretty good lookover to measure our own performance.”
The survey was broken into 10 categories: relationship management, sourcing, contract administration, use of technology, information technology procurement, workforce, training and certification, organizational culture and leadership, pre-sourcing and procurement planning, organizational structure and authority, and performance measures.
Governing released the overall rankings of just the top 25 states, and just the top five in each category.
Michigan ranked high in administering contracts in part because it provides documents and forms online for those who manage them, Davis said.
Farmer said the states that didn’t score as well had poor leadership and lack of technology.
“Some of it’s leadership – a governor and executives that really want to make purchasing better, faster and cheaper,” Farmer said. “Another thing is those states didn’t have the willingness to adapt technologically.”
Old techniques preferred by central offices throughout the country decrease the efficiency of their state’s spending, wasting taxpayer money, according to the report.
Michigan has approximately $4 billion in state revenue that it spends in more than 290 categories of goods and services, Davis said.
And Jenni Riehle, a communications analyst for the DTMB’s procurement staff, said, .“We have over 900 multi-year contracts on the books as of now.”
Every state has a procurement office, which oversees the purchasing process for public authorities, such as government agencies, as they obtain goods and services.
What the top-ranked states have in common, according to the report, is an effort that began more than a decade ago to modernize technology and introduce new ideas. That’s a challenge with limited resources.
The National Association of State Procurement Officers says that 40 percent of state offices report being understaffed. That leaves little capacity for getting creative and trying new ideas.
“Back in April of 2014, we started an overall improvement plan to improve all aspects of state procurement,” Davis said.
His agency studied how to reduce costs, streamline contracts and better leverage buying power.
The association’s executive director, DeLaine Bender, wrote in an email, “The Governing Institute’s spotlight on procurement demonstrates the increasingly strategic role that procurement professionals play in managing state governments effectively and efficiently,”  adding that Innovative procurement practices affectt every citizen.

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