Posted by GET NJ on 06:52:01 12/15/04
NEWS RELEASE
Acting Governor Richard J. Codey
Date: December 14, 2004
FOR MORE INFORMATION:
Kelley Heck 609-777-2600
CODEY NAMES BUDGET ADVISORY TEAM
Also sends out RFP for company that would help State leverage its purchasing power
(TRENTON) Acting Governor Richard J. Codey today named his budget advisory team three business professionals who will help identify ways to close the State s deficit.
The Acting Governor also announced he is putting out a Request for Proposals, for a company that would help the State save money by purchasing goods and services more efficiently.
This next budget is a daunting challenge. We must seek ideas and advice wherever we can find them. One important place we can look is the business sector to leaders who are experienced in meeting the bottom line, Acting Governor Codey said.
The three business leaders will work with the State Treasurer and leaders in the Legislature to analyze revenue projections; find ways to reduce spending; and help develop the next State budget.
Acting Governor Codey also discussed his Request for Proposals, which will be advertised by the Treasury.
We have to be on the lookout for savings, no matter how big or small. Every dollar saved counts, the Acting Governor said.
Under the RFP, New Jersey is looking for a consulting firm to help the State develop a strategic purchasing program a plan that will help New Jersey save money on virtually every type of good the State purchases, from computers to police cruisers to business cards, by leveraging the State s buying power with that of hundreds of local entities.
Each year, State government purchases about $1.9 billion worth of goods and services. The State would gain a better bargaining position by working together with the 1,700 local entities, including local governments, school boards and fire departments, that spend hundreds of millions more on purchases.
When the State needs to buy computers, for example, it would join forces with other entities that need the same type of equipment. By buying in bulk, the State and other entities could bargain for a much better price.
New Jersey does not currently have a plan to leverage its buying power with those local bodies. When State government needs to buy an item, there is no central database that can tell how much of that item has been purchased statewide. As a result, State government and the local entities cannot unite their total buying power, and cannot negotiate for the lowest prices.
In the past few years, however, at least 10 states have begun to implement this type of initiative.
The State of Virginia predicts it will save $180 million for state and local governments over the next five years. Connecticut expects to save $3.75 million in Fiscal 2005. Delaware expects savings will eventually represent 15 percent of all state purchasing. New Mexico is saving an average of 20 percent on purchases.
State Treasurer John E. McCormac noted that, while programs and procurement conditions vary from state to state, New Jersey could expect significant savings by implementing a similar program. The RFP will help New Jersey find a consulting firm that has developed such purchasing plans for other states.
This is a collaborative, buying-smart approach to purchasing that recognizes how strength in numbers and volume can influence bargaining power, Treasurer McCormac said. A key part of this contract is for the consultant to help New Jersey establish a state-of-the-art financial reporting system, which will capture buyer and vendor information statewide.
By not leveraging our own purchasing power, New Jersey is not being efficient or businesslike. And we re probably paying too much. For that reason we re looking for a consultant with experience in helping states implement new purchasing plans and help us realize savings, the Acting Governor said.
The members of Acting Governor Codey s budget advisory team are:
· Philip D. Murphy, of Red Bank, a retired partner of The Goldman Sachs Group, Inc. Mr. Murphy has been an international business leader for 20 years. He has worked in He has worked in Frankfurt, Hong Kong and New York, and led a number of major company initiatives. He oversaw his firm s global private wealth management business; and helped form the unit responsible for firm-wide business in the emerging markets of Europe, the Middle East and Africa.
· Barbara M. Washington, of Cape May Courthouse, Vice President and Philanthropic Consultant of the Merrill Lynch Center for Philanthropy & Nonprofit Management. Ms. Washington helps nonprofit organizations with strategic planning, training and advancement efforts. She previously served for several years in the New York State Office of the Comptroller, and has private sector experience at First National Bank of Chicago and Continental Insurance.
· Thomas M. Jackson, of Morristown, brings 20 years of legal and corporate budget management experience. As Executive Vice President of the GAB Robins Group of Companies, the world s second-largest independent loss adjustment firm with operations in more than 50 countries, he helps manage the company s global budget and its financial strategic plan. He also serves on the boards of various non-profit organizations including the United Way of Morris County, where he actively participates in the review and development of budget and other financial matters.
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