Newton Valley Public School Case Study

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Newton Valley Public School

Case Study

TABLE OF CONTENTS

Executive Summary        p. 2

Issue Identification        p. 3

Environmental Root Cause Analysis        p. 3

Alternatives        p.4

Recommendation        p.6

Implementation        p. 7

Monitor and Control        p. 8

Executive Summary

The Manager of Procurement Services, Martin Humphries at Newton Valley Public Schools (NVPS) has entered into two cooperative purchasing arrangements; one is in Computer Purchasing and the other in Multi-School Board Cooperative.  Rachel Chen from The Board of Trustees oversees the finances at NVPS and the current issue is to show whether the two cooperative purchasing arrangements are of value and if NVPS should continue in these agreements

Re-election is coming up for Rachel Chen and as part of her strategy she will discuss costs-savings; the pressure is put on the Procurement departments to show financial results from the purchasing agreements.  While the Computer Agreement is working well in terms of cost-savings the IT manager feels they are forced to buy items that NVPS doesn’t require.   Moreover, Humphries feels the of supply chain functions are not as efficient as they are spread throughout other departments; the Facilities Division handles warehousing and distribution while the day-to-day computer purchasing is handled by the Information Technology Support department.

Humphries has alternatives to choose from, such as expanding the consortium, keeping the consortium with adjustments in multi-school agreement and leaving the current agreements.   Keeping the consortium with adjustments in multi-school agreement will save on set-up costs. The computer agreement proves to show cost-savings while the multi-school agreement will need to be adjusted.  

Humphries will need to implement meetings and analyze costs structures to prove cost-savings.  

Issues Identification

Newton Valley Public Schools (NVPS) has been operating with two cooperative purchasing arrangements; one is in Computer Purchasing and the other in Multi-School Board Cooperative.

NVPS Manager of Procurement Services, Martin Humphries likes the idea of collaborative purchasing; however, Rachel Chen on the Board of Trustees has questioned whether the two purchasing agreements are effective and would like clear documentation.  The main issue is to assess and determine if NVPS should continue with the strategy of using collaborative purchasing agreements for the Computer Purchasing and Multi-School Board Cooperative.

Moreover, with NVPS’s experience in group purchasing, they have been invited by the Association of Rural School Boards to help set up and develop a province-wide group purchasing organization that will manage the purchasing activities for all interested boards across the province.

Environmental Root Cause Analysis

Rachel Chen is running for re-election and would like a good financial plan to contest the financial problems at the NVPS; this will help her for the board chair position.  Chen is questioning the procurement strategy and putting pressure on the Superintendent of Schools to ensure that the NVPS stays within its budget.   As the Superintendent is ignoring Chen, she is now bypassing the Superintendent and calling and emailing the next few levels of administrators directly. The lower level administrators are feeling subtle pressure to respond, with Chen intimating that their jobs might be in jeopardy if they do not cooperate.  While Chen could be looking out for the public interest to improve the financial situation, her motives may seem to be geared towards her own re-election.   The pressure and intimidation put on lower level staff instead of the Superintendent is unfair and is now causing Humphries to conduct additional work to justify his procurement strategy.

The provincial grants provided to NVPS over the last five years have dropped by 7.5 percent and has resulted in some administrative staff being laid off and a hiring freeze being put in place. The Trustees would like to add new and innovative programs to grow the school system; however, with low funding and cost saving initiatives, building maintenance is deferred and there has been a reduction in support for extra-curricular activities.  Children’s education is suffering from the decrease in funding and cutbacks in recreational activities, a procurement strategy could possibly find some savings and dedicate funds where financial aid is required.

It is common for most school districts for the Procurement department to be part as the Finance and Administration division. The view of the Procurement department is a cost centre and while 95 percent of the school’s budget is related to salaries, there is no pressure to deviate from this perspective.  The challenge is to change the mind-set of the Procurement department as a cost-savings department as this department can show value by creating purchasing agreements/strategy to save money.

A challenge that Humphries noted is that functions under the supply chain management umbrella were given to other departments at NVPS.  For instance, the Facilities Division handles warehousing and distribution while the day-to-day computer purchasing is handled by the Information Technology Support department.  While the Procurement Department handled the contractual agreements of the IT arrangements, having an IT person without procurement experience make decisions foregoes possible cost-savings opportunities.

Humphries also faced the perception that the collaborative IT contract with Redditch School Board (RSB) was a bit risky by the IT department and Chen.  The IT Department had technicians that were concerned that being they had to purchase equipment that didn’t meet the NVPS needs and Chen was nervous about giving up control too much control.  Without knowledge and understanding of procurement, other departments and onlookers that do not comprehend the details of procurement and the collaborative agreement, they lack the insight as to how aggregate purchases and strategy come into play.