The Oklahoma Office of State Finance provided the state with some great news last week!
As you may recall, purchasing reform was one of the first efforts launched by the House as part of the Government Modernization initiative. During the 2008-2009 legislative sessions, we acted on reports from IBM and Treya Consultants and rewrote the state’s purchasing laws to provide a special emphasis on managing the state’s millions of dollars of spend in a strategic manner that will hopefully match best procurement practices of free-market business entities. Simply put, the the state was spending your money inefficiently and the consultant report clearly showed the opportunity for savings. We acted on that report and attempted to enable the processes to drive down the cost to the taxpayer.
When we changed the law to allow for better managed purchasing processes, we also included a transparency requirement. Because of this requirement, purchasing officials must report the amount of savings each year that are attributed to the new system of contract managing mandated by the reforms. They provide this information in a report to the Legislature.
In November, the Government Modernization Committee heard testimony that indicated the savings from these reforms could amount to as much as $20M over the past two years. However, in the recently released report, it now appears that the two-year savings has reached $22M, which is $2M more than expected. $14M of this was realized in the last year alone!
This clearly shows that Oklahoma central purchasing officials are working hard to follow through on the reforms and they are taking seriously their responsibility to serve the taxpayers well. I have enjoyed working with the state’s purchasing director and his team; they have worked hard to bring about these savings.
As legislators, we must also continue to follow through. This year the Government Modernization effort will include legislation to continue the purchasing reforms and build in even more savings. We still have a long way to go as the IBM report showed up to $75M could be saved with purchasing reforms, but I believe we are up to the task.
Specifically we will consider legislation that would combine spending by Higher Education institutions with spending by state agencies. Under the current system, this spend is bifurcated. The taxpayers are not realizing savings based on the combined purchasing power of these groups. According to the report, Higher Education realized savings of $620,000. This number could probably be much higher if they were given the tools to drive down their own costs and help other state agencies better leverage their purchasing power.
We also have the responsibility to reduce Oklahoma’s tax rates and allow the millions of dollars of savings from the Modernization reforms to be returned to the taxpayers.
I am confident that we will be successful in both of these efforts during the upcoming session.
State Representative Jason Murphey
2300 North Lincoln Blvd
Oklahoma City, OK 73105
1(405) 557-7350 (Office)