City saves money by using GPOs

By Theodora MacLeod - Lethbridge Herald Local Journalism Initiative Reporter on January 13, 2024.

Herald photo by Theodora MacLeod Tyler Kacsor, supply chain manager for the city of Lethbridge, discusses the city's use of Group Purchasing Organizations to save money in the city of Lethbridge Central Stores on Friday.

The City of Lethbridge has announced it saved $1.5 million in 2023 by using Group Purchasing Organizations (GPOs) to obtain goods and services.

Tyler Kacsor, supply chain manager for the city, compares GPOs to having a Costco membership – The consumer pays a fee and can purchase products at a discounted or wholesale rate.

Kacsor told media on Friday that one of the GPOs the City has used is Canoe procurement group of Canada which has contracts with suppliers such as Grainger Canada, Armtec, and Coast Wholesale Appliances.

While saving money is of great value to the city, especially given the rising costs of goods, the partnership touts other benefits including a swifter receiving process, and a reduction in administrative tasks for city employees.

By essentially contracting vendors to cover the administrative duties, city employees are able to use their expertise appropriately rather than spending time on tasks that do not require their knowledge.

“By having these contracts that are already available to us, we’re able to save a significant amount of admin time, depending on the size and scale and/or complexity of the specific procurement that we would take to market you could see soft cost savings on the admin side of $10,000 to $20,000 and on more comprehensive projects you could even see more significant savings,” explained Kacsor, adding that all funds saved will remain within the business unit as all working capital remains within the department.

The City has utilized GPOs to procure for fleet and parks specifically with GPO partnerships with companies such as NAPA auto parts and Grainger, however it intends to expand to other maintenance and operational supplies.

There is a limit, however, to how the City can use the GPOs. Any product or project with a cost of $75,000 must be open to the public for bidding, though Kacsor said that local vendors can also participate in bidding for projects with a lower price tag by joining a GPO.

A press release notes that City manager Lloyd Brierley has championed the use of GPOs for nearly three decades, starting with the Saskatchewan provincial government. He introduced the practice to the City of Toronto.

“He brings a wealth of experience and knowledge around the history and evolution of group purchasing to Lethbridge having helped introduce this innovative procurement practice to municipalities across Canada,” says the release.

“I have seen the effectiveness of GPOs in many different organizations and municipalities, and I was confident it would help us save dollars and staff time here in Lethbridge. I’m thrilled see those savings being realized for our City,” says Brierley in that release.

The City will be holding the Lethbridge Buyers Expo and is inviting all vendors interested in learning more about how to get involved with GPOs on Jan. 31, alongside the provincial buyer’s expo. Tickets are free and attendees will learn more about the process and how to become a vendor.

More information can be found on the Lethbridge Buyers Expo and Information Session Eventbrite page.

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