FINANCIAL MANAGEMENT/Governments team up for savings

More than 7,000 city, county and state customers of Public Technology, Inc. (PTI) believe there is strength in numbers.

Instead of shopping alone for high technology at competitive prices, these governments are joining PTI’s national technology procurement program, avoiding long and costly bid cycles on everything from telephone calls to computers.

According to G2 Research, a Mountain View, Calif.-based watcher of public sector markets, local and state governments in the United States constitute a $34.5 billion information technology market. Last year, they topped federal technology spending by more than $6 billion. And by 2001, G2 predicts their annual technology expenditures will exceed $45 billion.

PTI — the non-profit technology R&D arm of the National League of Cities, the National Association of Counties and the International City/County Management Association — first pooled local governments’ formidable purchasing power eight years ago, when it struck a deal with telecommunications giant AT&T.

The agreement guaranteed all governments, large and small, the highest possible commissions on long distance calls made from pay telephones in public buildings and rights-of-way. The deal now pays local governments over $50 million each year.

PTI has since initiated other national cooperative purchasing programs. A second agreement, also with AT&T, offers low group rates on long distance and toll-free telecommunications. A third, with Compaq Computer, encourages local resellers to provide top-quality computers — desktops, laptops and servers — at special prices to government. And a fourth, with Anixter, provides a large selection of telecommunications and networking equipment, as well as customized service.

“PTI’s membership has crafted a winning, democratic process that upholds the ethics of public purchasing and puts the benefits of technology within easy reach of all communities,” says PTI President Costis Toregas. “Now, it’s up to the individual mayor, commissioner, manager and purchasing agent to take advantage of this process.”

Many are doing just that. For small communities like Florence, S.C., a city of 29,813, the program means access to technology that they could not afford alone. “Bidding out long distance telephone service on a national basis … is the way to go,” says Florence purchasing agent Bill Bramlett. “By taking advantage of PTI’s long distance telecommunications program, we’ve saved ourselves a lot of time we would have spent conducting our own bid process.”

The National Institute of Governmental Purchasing (NIGP), the non-profit organization of U.S., Canadian and other government purchasing agencies, has added its stamp of approval. NIGP reviewed the process by which PTI awarded contracts to AT&T, Compaq and Anixter, concluding that the contracts “were a result of vigorous competitive bidding” and met standard public purchasing criteria, from nationally advertised RFPs to winner selection and final negotiations.

Even larger cities that wield considerable clout in purchasing negotiations see a competitive edge in the programs. Atlanta, for example, adopted a resolution in January allowing city agencies to buy directly from PTI’s master contracts with Compaq and AT&T. According to Atlanta MIS Director John Cuffie, the city anticipates also being able to negotiate value-added services from Compaq resellers, since the agreement encourages the resellers to promote the procurement program to local and state governments.

Clearly, the math of market aggregation is adding up to smarter government.

Shaden Tageldin is writer/man-aging editor of publications and Linda Keenan is business director of enterprise programs for PTI, Washington, D.C.