From tractors for the LSU Agricultural Center to test tubes for biology labs, LSU has been trying for two years to set up its own procedure — independent of the state — to buy goods and services in bulk.
People with knowledge of LSU’s inner workings estimate the savings from such a move could reach upward of $30 million over five years if the state would allow the university’s way to buy products in large quantities.
But it now looks like that autonomy is not coming anytime soon. LSU needs the blessing of the state Joint Legislative Committee on the Budget before it can start purchasing on its own. Staffers associated with the committee recently asked for more time to review LSU’s proposal, essentially postponing any decision on the matter indefinitely.
When LSU is looking to buy anything from classroom supplies to office furniture, they have to go through multiple approval processes from state agencies, including the Division of Administration, the Office of Contractual Review, the Office of State Purchasing, and sometimes the Office of Information Technology.
It’s a time consuming process that those involved in higher education say hamstrings schools to make quick decisions, therefore making them less competitive when compared to other universities in states such as North Carolina, Virginia and Arizona that already have purchasing autonomy.
State lawmakers and Gov. Bobby Jindal sought to strip away some of that red tape with the passage of the LA GRAD Act 2.0 legislation in 2011. The law gives colleges more autonomy in purchasing and other areas in exchange for increased college graduation and retention rates.
In a 2011 speech at LSU, Jindal criticized the state’s multiple layers of bureaucracy, telling the crowd that any LSU contract exceeding $100,000 requires 13 steps and 22 weeks to be finalized.
The GRAD Act 2.0 is supposed to streamline that process, the governor said.
The law offers three tiered levels of autonomy with increased performance goals for each level of greater freedoms. LSU scored at the highest level, meaning the university has plenty of leeway to write what is known as a “pilot procurement code.” It’s basically a detailed plan spelling out how LSU plans to negotiate contracts for goods and services if they have the autonomy do so without all of the red tape from state government. If approved, the procurement code would be good for three years before it came up for review.
Marie Frank, LSU’s chief procurement officer, said the university wants the flexibility to use a number of different strategies in hopes of getting the most affordable price.
In a reverse auction, for instance, LSU would define a good or service it is interested in buying. From there, the university would send out an electronic message to vendors. Those vendors would then start submitting bids — going lower and lower — until only one vendor is left standing, offering LSU the lowest price.
Frank said the law will also help LSU in other ways. State law says that certain contracts can’t exceed five years.
That poses a problem when LSU is trying to negotiate with certain vendors such as transportation companies. “Large buses have a life span of more than five years, so these companies are forced to bid higher to capitalize on their equipment” she said.
If the state were to grant the university authority to negotiate those contracts, LSU could get a much more affordable price, Frank said.
Procurement, or bulk purchasing, was one of the major areas looked at by the LSU Transition Team. The team was assembled to study the university and then recommend ways LSU could become more competitive nationally.
Christel Slaughter led the effort. On Wednesday, she said projections that the university could save $6 million per year or $30 million over five years, are conservative estimates.
She called bulk purchasing autonomy one of the most best things that could happen to LSU.
“As we looked at trying to get the university set up for the future and less dependent on state general fund dollars, we found this to be really important,” Slaughter said. “This sort of thing would make LSU a master of its own fate.”