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City Memo To Self: Buy More Locally
by Allan Appel | Sep 9, 2013 2:30 pm
Posted to: Business/ Economic Development, The Hill
The city can’t purchase New Haven-made computer equipment or or New Haven-made textbooks from a local vendor. That’s because such businesses don’t yet exist in town.
We do have Lupi-Marchigiano’s 100-year old bakery in the Hill to buy rolls and bread from, and the city and Board of Ed do so. Big time.
Yet only approximately $30 million or 26 percent of a potential $115 million in municipal purchases of goods and services annually are from local vendors.
That finding and how to increase the number were the focus of city press conference announcing the first phase of the city’s “Buy Local Initiative” in front of the Lupi-Marchigiano Bakery Monday morning on Washington Avenue in the Hill.
City economic development officials gathered at the bakery. Mayor John DeStefano recalled, with a gleam of remembered pleasure, buying loaves of hot Italian bread there when he was a boy. He called the bakery one of the major purveyors of bread products for the school system.
Compared to other cities, New Haven is doing pretty well on local purchasing, according to Jon Aram, a partner with Roxbury, Massachusetts-based Next Street, the consulting firm the city retained in February 2012 to sort through the data and procedures of how all the city departments buy their bread, pencils, bathroom tissues, and desks, among a gazillion other items.
“We weren’t sure how we were performing with local businesses,” said Christopher Canna, the project director for the city.
Although the city felt it was doing well in certain areas, such as its local workforce initiatives, other procurement areas were a bit of a mystery.
Now the research has revealed some answers.
Click here for an executive summary of the report, which is based on 2011 numbers.
Among highlights: 25 percent of some $12.7 in food purchases comes from in-city vendors, and 37 percent of $3.8 million in medical supplies and services.
Some city departments do a lot of local purchasing. The high spending local laurels going to community services (95 percent) and elderly services (93 percent).
But textbooks, fuel, and electrical supplies, for example, that add up to about $5.9 million in buys, show not a dollar being spent in the city.
The report’s main chart indicates tgat other high-spend categories with room for much improvement include legal services, office supplies, furniture, and paper products. All told those category purchases add up to $12.9 million, of which only 27 percent is from local vendors.
In part that derives from the city’s internal directive in most instances to award contracts to the lowest bidder
Among other problems, “there was no handy information on vendor performance, or purchasors [procurement personnel] communicating from department to department,” Canna said.
“Our job is to keep and attract jobs.,” said city Economic Development chief Kelly Murphy. She prophesied the two main route to continue to do that are “tech transfer and supply chain.”
By “tech transfer” she mentioned, for example, Alexion Pharmaceutical’s replanting itself in the unfolding 100 College Street development.
“Supply chain” refers to getting the word out to more local vendors, making doing business with the city easier, and reducing internal barriers to local procurement.
Among the latter, the mayor cited “removing artificial barriers, like bid levels.”
Sargent/Assa Abloy Director of Corporate Communications and Public Relations Marna Wilber was in attendance at the press conference. She said she found it “refreshing that the city is asking questions on how many of our funds are staying in the city.”
The city has bought locks and other devices from Assa Abloy over the years particularly for its new school buildings; Wilber did not know immediately the level of spending.
Officials plan soon to announced specific steps explain the city process with more transparency, reach out and offer training to local businesses. The city plans also to enhance the tracking of local vendors and their performance.
That all may require adding one person to the purchasing department, according to the report.
In the meantime, the mayor offered some advice: “Buy more bread.”
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Thank you for this excellent article on local purchasing by city government. I look forward to reading updates on the issue, and hope that the city is able to spend more money on local businesses, which will greatly benefit all residents of the city.
Unfortunately, it seems that the other major buyer in town—Yale University—has devoted itself to crushing local business (unless it’s of the froyo variety). Yale Properties has essentially pushed out local businesses through its downtown business development, and we’ve now reached the embarrassing point where “The Shops at Yale” advertise enormous national chains that could be found anywhere, rather than Cutler’s, Labyrinth, Yankee Doodle, News Haven, or any number of locally owned businesses that have been run out of Yale Properties’ buildings.
I would love to see Yale University make a commitment to match the city of New Haven’s spending on local vendors. That kind of economic support for New Haven businesses by the city’s largest employer (and one of the most profitable companies in the world, if it was categorized as a for-profit company) would go a long way in helping our communities gain economic independence.