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The Fourth of July fireworks display in Tucson, Ariz., is being canceled this year, not because of a lack of patriotism but in response to the precipitous and lingering economic downturn. Tucson also canceled the city contract to wash the windows at City Hall and is taking a critical look at every purchase at a time when many local governments are having to lay off staff and make other drastic cost-cutting moves. Tucson's recent budget woes are typical of many locales: a 25 percent cut over two years and a procurement staff that has dwindled from 89 in fiscal year 2004 to a projected 50 in fiscal year 2010.

It only takes a few phone calls around the country to reveal the breadth of the economic impact on the government procurement community. The Port of Portland (Ore.) has cut expenses, deferred capital projects and increased their grant applications. There are fewer employees, and the remaining staff is being asked to take 15 days of unpaid leave over the next 15 months. The Port has also seen a 20 percent decrease in passenger volume and has lost a shipping line. Mississippi State University is facing 5 to 10 percent budget reductions because of dwindling state tax collections. Fort Lauderdale, Fla., is facing a 10 to 11 percent decrease in revenue because of lower property values. Hiring freezes in Cape May County, N.J.; Rockland County, N.Y.; and hundreds of other governments leave procurement staffs to face the challenges of the tough economy with unfilled vacancies and less staff.

Fortunately, strategies are often in place to promote efficiencies and cut costs as painlessly as possible in the midst of the dire economic straits. From coast to coast, local governments are cutting discretionary spending and taking a hard look at which capital projects can be delayed until next year. Procurement departments have been doing their part by streamlining and automating business processes, carefully analyzing spending trends, participating in more cooperative purchasing, outsourcing more services and renegotiating lower prices on contracts. The purchasing function is also dealing with intensified scrutiny of expenditures by the city manager staff, often with lower spending thresholds requiring review, which adds processing time. Purchasing professionals say many of these efforts were already under way, but the economic downturn has focused new attention on their importance.

Spending less means more work

There is a widespread misconception that spending less means less work for the procurement staff, says Paul Brennan, director of purchasing, Rockland County, N.Y. "It couldn't be less true," he says. With staff levels declining, the work is shared by a smaller group, even as the economic downturn requires more scrutiny of each purchase. "We are reviewing every annual contract we have in place," Brennan says. "Do we need it? Is the usage enough to warrant going through the formal process? Can we piggyback on state contracts rather than do our own solicitations?"

Here is an example of how less money doesn't translate into less work: "Just because the county's spend on uniforms has decreased from $150,000 to $80,000, the contracts still have to be in place," Brennan says. "Departments are coming to me and saying I have used this product for 15 years and my budget has been cut 20 percent. We have to negotiate with buyers or find a less-expensive option."

Marcheta Gillespie, Tucson's deputy director of procurement, says the challenging economy has opened new opportunities for her staff to work in partnership with their internal customers to identify any and all possible cost-saving measures. "Bottom line, we have had to learn how to provide the same level, or higher level, of service to our customers with far fewer resources," Gillespie says. (And, presumably, dirtier windows.)

Edmund Grant, chief financial officer and P-card program administrator for Cape May County, N.J., sees procurement as a main player in the county's efforts to "reinvent county government" and to find ways to save costs, whether by outsourcing fleet maintenance or printing, or evaluating communications technologies. "As a result of this process, purchasing's value has been elevated as a strategic process. We aren't just pushing papers; we are in the trenches reviewing these things, looking at the various options and getting to know suppliers better." Procurement has led the way in Cape May County by implementing a P-card system, using online auctions and creating Web sites for specifications, among other efforts.

Fort Lauderdale has seen an uptick in protests from suppliers who lose out in award recommendations, which also aggravates workload. "There is not a lot of private work going on, so [suppliers] are fighting for every dollar in the public sector," says Kirk Buffington, Fort Lauderdale's director of procurement services. "Under our procedure, the protests end up in front of the county commission at a regular meeting. I have to deal with every protest, and it takes away from other things."