A world apart

Commodities purchases run
the gamut between small, large cities

By Sean Ryan
Daily Reporter Staff

Web posted: July 24, 2001

"We don't send bids out to every vendor anymore because we find we have a very low response rate. Now all registered vendors get a faxed notification that it's on the Web site." Cheryl Oliva Purchasing Director City of Milwaukee

Economic principles are the same whether someone's buying a hot dog from a street cart or five tons of asphalt from a supplier.

Every consumer, from city purchasers to hungry pedestrians, buys from the vendor who offers the best deal.

Although selling to big city purchasers is different than cutting deals with small towns, the principle doesn't change and the same state laws regulate both, said Bill Arndt, Black River Falls city clerk, treasurer, community and economic development coordinator and zoning administrator.

"Everybody has their own budget to protect, so everyone is trying to buy as cheaply as possible," Arndt said. "We're not any different than any other city. We're just trying to maximize the bang for our dollar."

Arndt said he handles Black River Falls' $400,000 annual purchasing budget because the city doesn't have a procurement department. He said the city doesn't make many purchases other than a new pickup truck each year and periodic restocking of the road salt and gravel supplies.

That's a far cry from Milwaukee, where the city's Procurement Services Section spent $65 million on 1,000 requisitions in 2000, said Cheryl Oliva, Milwaukee purchasing director. The city has a database of 8,000 qualified vendors, and suppliers can join the list through the Internet.

To register as a Milwaukee vendor, companies just fill out an online form, providing product information, bonding status and company contacts. Oliva said before Internet applications were available, vendors had to endure an eight-step certification process and too much paperwork.

"Right now all they have to do is visit the city of Milwaukee Web site, and they have to fill out a form, and we'll put them on the list," she said.

The simple life

Arndt said he knows the city's regular vendors and doesn't worry much over certification. But he does require companies to fill out forms with bonding information.

"We assume they are qualified when we get their bid," Arndt said.

Arndt said Black River Falls doesn't need a special procurement division, as in Milwaukee, because local vendors usually know what he's in the market for, and he knows which suppliers to go to for the city's needs. He said he keeps the process informal unless a commodity is worth more than $5,000. That's when the city places bids in the local newspaper and waits for responses.

"We don't have a purchasing department here, and we don't get purchasing orders," Arndt said. "Anybody that's got anything for sale would know if the city is interested in buying it or not. And when it's a small area like this you know who has what."

Oliva said for any bid more than $30,000, her section solicits offers from every vendor in the database certified for whatever commodity the city needs. She said the city can't afford to send each bid to every bidder on its list, so it began posting all bids online last year.

"We don't send bids out to every vendor anymore because we find we have a very low response rate," Oliva said. "Now all registered vendors get a faxed notification that it's on the Web site."

She said it takes five or six weeks for Milwaukee to close a deal, with two or three weeks of open bidding and the remaining time getting the purchase approved.

Both cities allow their departments to make purchases cheaper than $5,000 without formal bidding. Oliva said Milwaukee allows departments to buy from "valued suppliers" on the vendor list. Arndt said he collects price quotes from local vendors who register to supply a particular commodity, and he takes the cheapest.

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