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County changing purchasing method; annual savings of up to $10M expected

Mecklenburg County officials today said the county will start using “strategic sourcing” to buy goods and services, a move expected to save $6 million to $10 million a year.

As part of a contract with Deloitte Consulting, which stands to earn more than $3 million, Deloitte will help implement the system, which involves consistently buying goods and services at negotiated best prices and at times of the year when prices are at their lowest.

“We’re going to be doing purchasing in a completely new way,” County Manager Harry Jones said today in outlining the changes at a Board of County Commissioner’s budget and public policy workshop. ”Taxpayers could see a $2.60 return on every dollar invested through this business case.”

The county will pay Deloitte $540,000 for its consulting services, which will include training county staff. County officials say they will also pay as much as $3.4 million to Deloitte if estimated savings are realized.

Deloitte will invest a portion of its fees to pay the cost to implement the system and receive payment based on savings the county experiences, county officials said.

As part of the initial phase, Deloitte will identify the best technology, including automated contract-management and sourcing tools, that the county should use. County officials say Deloitte estimates that improving the county’s hardware and software could result in additional savings of $13 million to $20 million if fully implemented.

A decision about approving the technology phase of the plan is expected to be made after results of the first phase known.

Jones said the purchasing changes are part of his promise in his budget message last year to reshape the county.

“Emphasizing fiscal discipline and operational excellence are two of the ways we will be doing that,” he said.

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