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Harnessing the power of group buying


October 4, 2013
By Tony Palermo

Harnessing the power of group buying

UK police services are “still wasting millions by not buying jointly in bulk,” the UK Guardian reported in a Sept. 17, 2013 article.

The Home Office, responsible for immigration, security, and law and order, set up a dedicated online hub in 2011 to buy police equipment. The expectation was that all 43 forces across England and Wales would be using the procurement site by June 2012 but, according to the article, fewer than half of the services had used it. In fact, only two per cent of all police equipment purchased last year was bought through the site.

OPP Supply Services Manager Jackie Reilly wonders why.

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“Police agencies can really benefit from the buying power of a cooperative purchasing group,” says Reilly, who is also chair of the clothing and equipment side of Ontario’s Police Cooperative Purchasing Group (PCPG).

Created in the 90s, it is an independent consortium of Ontario police services, separate from the OPP, who share equipment and procurement information, harnessing the savings and negotiating power of buying in bulk.

The group is made up of both civilian and sworn officer quartermasters from across the 20 to 25 Ontario police services who regularly attend the quarterly meetings. Participation is voluntary and a service doesn’t have to be a sitting member to take advantage of the contracts the group negotiates.

In general, the PCPG assigns a member agency — typically a larger service like the OPP or Ottawa or Toronto police — to be the lead for a particular item. As the lead agency, the service is responsible for testing and evaluating it and preparing the Request for Proposal (RFP) on behalf of every Ontario police service.

In preparing the RFP, the lead agency takes feedback from all members on what they expect of the item and the options that should be built in to the main contract (for example, some services prefer a certain number of belt loops or type of stripe on a set of pants). Other considerations include expected delivery term and penalties for vendors who don’t meet their obligations.

Once everything is agreed upon, the RFP is posted and awarded according to the municipal (or in the case of the OPP, provincial) procurement guidelines. The contract is posted on the PCPG’s procurement web site and made available to every service across Ontario that wishes to use it.

It’s important to note that, with the exception of the lead agency which negotiated the contract, Ontario police services aren’t required to buy that particular item from the vendor; however, negotiated contracts tend to offer considerable savings because vendors prepare their bids knowing they can potentially sell that item to every agency in Ontario.

While the cost savings the PCPG buying power offers is attractive, having a collective group presents many other advantages deeper than those on-the-surface savings.

“Consider how much it costs to research equipment, test it, put out a formal tender, negotiate pricing and then procure the equipment, especially in a larger service,” says Reilly. “That’s a lot of money and resources. By negotiating contracts with vendors on behalf of everyone, the PCPG saves individual agencies from having to do everything themselves.”

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As an example, the Ottawa Police Service (OPS) is the lead agency for three items, including a winter jacket. The OPS has its own clothing committee comprised of about 30 members across various sections, including patrol, health & safety, CID and the association. The OPS clothing committee meets three to four times a year and continually looks at new products and whether it should formally test them.

“As an estimate, I’d say we look at about four to five items each meeting, of which maybe two to three go to testing,” says OPS quartermaster supervisor Bill Keeler. “If we decide to test an item, it’s a formal process so a lot of time and resources goes into formally testing it.”

The OPS ended up evaluating winter jackets for more than a year before deciding on a suitable one. Factors considered included breathability, comfort, warmth, water resistance, how well it withstood repeated washing, the perception of the public and fellow officers and how it performed under day-to-day use by members.

“No one has an unlimited amount of money or time,” says Keeler. “By sharing the formal testing of standard issue police equipment, having a group like the PCPG saves Ontario’s police services a lot in terms of resources and time too.”

Smaller services also really benefit from the PCPG across the board.

“There’s no real disadvantage to participating,” notes Gananoque Police Service Chief Garry Hull. “It doesn’t cost anything to sign up and most of the work in terms of procuring the right equipment is done by them.”

Gananoque has about 15 sworn members and, like most smaller services, tests equipment informally. Evaluations are typically done by giving the equipment to a couple of officers who report back on whether they like the item.

Groups like the PCPG can take a lot of the upfront guesswork out of deciding whether an item is worth evaluating.

Smaller services also definitely benefit from the group buying power of a PCPG contract but it goes beyond just those initial savings, says Hull. Guaranteed delivery times and penalties if the vendor doesn’t meet delivery obligations are huge benefits that would be difficult for a smaller police service to negotiate.

“I’m a real stickler for deliver times,” says Hull. “I’m ordering equipment as I need it. So when I need it, I need it delivered within a reasonable time.”

Hull also notes that the PCPG contracts gives agencies negotiating power with other vendors.

“If you know the PCPG price, it’s not to say that other companies aren’t willing to compete and negotiate if you prefer to deal with a different vendor or select a different product.”

Miramichi Police Force Supt. Randy Hansen would like to see something similar to the PCPG created in New Brunswick. As it stands now, agencies in the province share information on an informal basis, if at all.

“Several years ago, they tried to set up something similar in New Brunswick but they couldn’t get everyone on board, so it fell apart,” says Hansen. “There has been a lot of changes in administration around the province over the last few years. I think it’s time to revisit this.”

PCPG clothing and equipment chair Jackie Reilly says she receives calls from services across the country and is happy to talk about the group and its negotiated contracts.

“I can’t really think of any disadvantages to a group like the PCPG,” says Reilly. “Aside from the obvious dollar savings, there’s a lot of knowledge and experience that is brought together in the group, so it also becomes a great resource and source of information.”