Reverse auctions allow suppliers to competitively bid in real-time, driving prices down and resulting in significant savings for the City of Los Angeles.

1. Kenneth F. Desowitz, C.P.M.
Director of Supply Services
City of Los Angeles
(213) 928-9557
kenneth.desowitz@lacity.org

2. LA City Overview
• Centralized Procurement of Commodities and Maintenance
Services for transactions over $1000
• Over $400 million in purchases annually
• 480 annual contracts
• 3500 one-time po’s
• 72,000 contract po’s
• 17,500 blanket po’s under $1000
• Supply Services Division is responsible for Procurement,
Inventory Management and Salvage Functions (150 staff
currently)
• Dealing with budget shortfalls for the past several years
• Recently lost 5 of 18 Procurement Staff to Proprietary
Departments due to promotions

3.
Procurement Savings/Avoidance Form
PROCUREMENT ANALYST: CONTRACT/P.O. NO.: SUPPLIER:
SAVINGS/AVOIDANCE METHOD USED:
 Value Analysis (i.e. annual fee vs. time & materials maintenance)
 New source discovered (new supplier discovered other than suggested supplier or from the
supplier database list)
 Market research (i.e. competitive bidding vs. contract renewal; pricing index or other agency’s
pricing vs. current contract pricing)
 Negotiated reduction in price and/or payment terms
 Annual contract created for item previously purchased as a one-time
 Change in design or specification
 Substitution (i.e. rebuilt vs. new; lease vs. buy)
 State, County or other cooperative purchasing contracts utilized (i.e. piggybacking)
 Reverse Auction (projected savings based on old price/established baseline)
SAVINGS/AVOIDANCE COMPUTATION:
ANNUAL CONTRACT: Old Price - New Price = Savings
Savings x Projected Annual Usage = Annual Savings
ONE-TIME PURCHASE ORDER: Req.Pre-Encumbrance - P.O.Encumbrance = Savings
EXPLANATION OF PROCUREMENT ANALYST ACTIVITY:
APPROVED BY: __________________________ __________________________
PROCUREMENT SUPERVISOR SUPPLY SERVICES MANAGER

4. Market Research
The purpose of market research is to analyze and evaluate the
external marketplace as it applies to product/commodity
purchases, to better understand how business is done in specific
industries, and to develop improved procurement strategies to
maximize value for each taxpayer dollar spent.
The key activities in market research are:
• Identify potential supply sources.
• Evaluate the industry.
• Identify viable supply sources.
• Perform supplier assessments.
• Perform supplier comparisons.
• Identify supplier opportunities.

5. Market Research cont.
Evaluate the Industry
This is an investigation of marketplace processes, trends and
influences:
• Supplier practices
• Other government agency purchasing practices. This
includes analysis of other agency contracts for potential
cooperative purchasing arrangements.
• Industry and market trends
• Industry capacity and utilization
• Pricing methods
• Cost drivers
• Market trends
• Market cycles
• Market timing strategies
• Technology
• Regulatory impacts
• Safety, health and environment

6. Cooperative Purchasing
• The City has been doing cooperative purchasing extensively for the
past 15 years
• City Charter and Administrative Code allow for piggybacking any
public agency contract regardless if competitively bid
• Approximately 50 of our 480 annual contracts are from cooperatives,
including City, County, Federal, Regional and National contracts
• The City currently uses 15 of the contracts marketed by U.S.
Communities
• Modular Furniture, Playground Equipment, Laptops
• Lead Agency for MFP/Copiers Contract
• Hierarchy of Cooperatives
• Advisory Board, Audits, LPA model, Transparency, Commitment
of best overall pricing, Saves Money

7. ADVISORY BOARD
The U.S. Communities Advisory Board is made up of key government purchasing officials from across
the United States. The Advisory Board provides leadership and overall direction for the U.S.
Communities Government Purchasing Alliance.
City and County of Denver Jim McIntyre, DIRECTOR OF PURCHASING
Great Valley School District Charles Linderman, DIRECTOR OF BUSINESS AFFAIRS
City of Houston Calvin Wells, C.P.M., CITY PURCHASING MANAGER
Harford County Public Schools Jeff LaPorta, SUPERVISOR OF PURCHASING
City of Kansas City Renee V. Haskin CPPO, MBA, ASST PROCUREMENT MANAGER
Hennepin County Christopher O. Gran, C.P.M., PURCHASING MANAGER
City of Los Angeles Kenneth F. Desowitz, C.P.M., DIRECTOR OF SUPPLY SERVICES
Los Angeles County Gerald R. Plummer, DIVISION MANAGER
City of San Antonio Denise Gallegos, C.P.M., PROCUREMENT ADMINISTRATOR
Maricopa County James E. Foley, CPPB, DEPUTY CHIEF PROCUREMENT
City of Seattle Nancy Locke, CITY PURCHASING MANAGER
Miami-Dade County Miriam Singer, CPPO, FCPM, FCPA, DIRECTOR
Cobb County Mark D. Kohntopp, C.P.M., INTERIM PURCHASING DIRECTOR
North Carolina State University Jessica G. Dalton, CPM, CPPB, PURCHASING AGENT
Denver Public Schools Michael Thomas, CPPO, C.P.M., DIRECTOR OF PURCHASING
Salem-Keizer School District LaVon Maskell, PURCHASING COORDINATOR
Emory University Rex Hardaway, DIRECTOR OF CONTRACTS
San Diego Unified School Dist Arthur S. Hanby, Jr., CPPO, C.P.M., CPPB, A.P.P., DIRECTOR
Fairfax County Cathy Muse, CPPO, DIRECTOR
Hillsborough County School Dist Jean Bowman, GENERAL MANAGER OF PURCHASING
Fresno Unified School District Paul Rosencrans, EXECUTIVE DIRECTOR OF PURCHASING

8. Founders- Founded, owned and governed by:
Association of School Business Officials International
(ASBO)
National Association of Counties (NACo)
National Institute of Governmental Purchasing (NIGP)
National League of Cities (NLC)
United States Conference of Mayors (USCM)
Over 90 State Sponsors

9. Illinois State Sponsors
Illinois Association of School Business Officials
Illinois State Board of Education
Illinois Municipal League

10. Reverse Auctions
• Conducted 9 Reverse Auctions for Commodities with great
success in the past year
• Auctions managed by Peralta Garcia
• $2.5 million in savings (19%)
– Traffic Signal LED’s
– Roll Paper
– Nitrile Gloves
– Trash Receptacles
– Office Products (in process)
– Water Treatment Chemicals (in process)