Chief Concerns

by Chief Richard Marinucci

Group Purchases Save Departments Money

Everyone is looking for ways to save money. I know from first-hand knowledge that there is a method that not only saves money, but time also. On the surface, it seems so easy and simple. It is difficult to find any logic not to pursue this process, yet it is not common practice and does not sustain over time when there are cases of its use.

I am talking about purchases that are joint ventures between two or more departments. Items that can be purchased range from small ticket, day-to-day supplies all the way up to apparatus.

Instincts tell us the more that we buy of an item, the more likely the per item purchase price will be less. In some cases, it can be a lot less.

In 23 years of being a chief, and even before that, I have seen group purchase projects come and go. From my experience, I can attest they always save money. In addition, gaining support from the policy making board of your department (fire board, city council, etc.) to save hard-to-come-by revenue is easy.

Getting Better Prices

Often, because of this support, higher quality “stuff” can be obtained at a lower cost than buying lower quality “stuff.”  For example, I can remember buying certain brands of turnout gear with a few extra “bells and whistles” at a cost per unit lower than the price I was quoted to buy a set with fewer options for only my organization.

Buying a higher volume of a specified item offers better pricing. Using the bidding process of a group satisfies the need for competitive bids. Purchases that exceed certain dollar amounts require approval of the governing body. Often, if that body knows it is a group purchase, they may expedite the process.

If it saves money and makes your job easier, you might ask, “why doesn’t everyone do it”? This is somewhat of a rhetorical question. First and foremost, the biggest challenge is trying to get two fire chiefs, or two departments, to agree on what to buy.

Take for example the largest purchase that most fire departments will have – apparatus. There are many makes and models and manufacturers, although not as many as there used to be. They all must meet certain standards set forth by the National Fire Protection Association (NFPA) and the Department Of Transportation (DOT).

All apparatus have to function to a certain level. All apparatus classified as a fire engine will have a pump, compartments and carry water. But like the purchase of an automobile, everyone has an opinion and a personal preference. It may be style, design or what a department has always purchased. It may be past history with respect to reliability and durability or common maintenance familiarity.

Suffice it to say there are many reasons, and everyone has a different perspective and places varying levels of importance on the options that may be part of an item to be purchased.

Obviously, it’s not advisable to start your first foray into group purchasing with something as expensive, complicated and “personal” as a fire truck. But in a perfect world, it should be possible. I have never heard anyone say that a building burned to the ground because of the wrong make of the fire truck.

To give balance, though, I have talked to many a chief who has had maintenance problems with certain brands. Of course, I have found, over time, I can find supporters and detractors of all brands. The conclusion is that apparatus is acquired for individual preference reasons, as well as performance reasons.

Another reason for the failure of a group purchase may be a lack of understanding of goals and objectives. Our organization currently uses group purchasing for medical supplies. There are a number of departments participating, and the volume is significant.

Approximately every three years, requests for proposals (RFPs) or bids are requested on the list of items to be purchased. It can range from bandages to splints, to IV set-ups, to other necessary medical equipment. The bids are evaluated based upon the overall cost of individual items and the volume.

For example a supplier may be lower on splints than a second supplier, who is lower on bandages. Overall, the group may buy many more bandages than splints, making the company that has a better price on bandages a better choice.

Where the groups sometimes split apart are cases where individuals look at the unit prices and determine that they can get individual items at a better price. In the example listed above, if a department decides to buy the splints and bandages from different vendors, the needed volume level is not met and the benefits of the group purchase decline.

There are at least two other reasons that have contributed to the downfall of previously established group purchases. The first occurs when there is a change in administrations or fire chiefs. Sometimes the new kids on the block want to do things their way. That is okay. I have seen new chiefs opt out only to have them suggest a few years later that a group purchase would be a good idea.

The second reason happens when chiefs or departments shop for a better price on items. Often they will find it because the vendor that did not get the overall bid would still like part of the pie. In order to break in, they need to offer better pricing. Once that happens, the group is on a slippery slope to a break-up.

With these challenges, it is still worthwhile to pursue group purchasing. If you plan on doing so, consider the following:

• -Build good relationships with your neighbors or those you want to join the group, and start with the easy stuff or small stuff. Fire hose, foam, or simple tools may be easier to sell than apparatus or turnouts.

• -Seek the help of a purchasing agent – usually someone who works with one of the communities. Purchasing agents are the experts in acquisition and may have experience with group purchases for other municipal departments, such as police, parks and public works.

• -Understand the biggest savings will be in the first year. There will not be subsequent similar gains .

Other things to keep in mind include:

• -Stick to the process and procedure. Do not opt out in the middle of the program. “Stay the course.”

• -Don’t shop around individually. You may not get exactly what you want, but it will meet a standard.

• -If there is something that you are passionate about, get actively involved in the process so you can influence others in the group to consider your preferences. Remember, it is about getting good prices for the things you want. Be upfront and let others know the items that you will not consider.

Our community has been involved in many group purchases – some specific to the fire department and others that apply to all of the agencies in our community. In all cases, the pricing is better than if we did it on our own.

Further, once the lists and prices are established, the process is simple – go to the list, select what you want. If its cost exceeds your authority, requiring other approvals, the fact that the item is from a group purchasing system makes the process easy.

Not everything that we buy is from a group purchase. But the more things that are, the better the opportunities to stretch your budget.

Editor’s Note: Richard Marinucci is chief of the Farmington Hills (Mich.) Fire Department, a position he’s held since 1984. He is a past president of the International Association of Fire Chiefs (IAFC) and past chairman of the Commission on Chief Fire Officer Designation. In 1999, he served as senior advisor to Director James Lee Witt of FEMA and as acting chief operating officer of the United States Fire Administration for seven months as part of a loan program between the City of Farmington Hills and FEMA. He holds three bachelor’s degrees in fire science and administration, belongs to several fire service organizations, has taught extensively and has been involved with the development of many courses.