November 22, 2010

U.S. Communities, the non- profit government-purchasing cooperative sponsored by The U.S. Conference of Mayors, the National Institute of Government Purchasing and others, has awarded a new office supply contract through the County of Los Angeles to Independent Stationers. Independent Stationers, a leading office supplies provider, gives purchasing officials in public agencies across the United States exclusive access to reduced pricing and substantial savings for their office supplies.

Public agencies that are participants in U.S. Communities have an opportunity to benefit from the new contract and its many features, not the least of which is a fiercely competitive pricing structure for office supplies.

Under the new contract, local office suppliers who are members of the Independent Stationers cooperative will fulfill orders placed by public agencies.

During a time of economic struggle and uncertainty across the U.S., cost'savings in any area of business is certainly a welcome, even mandatory, measure to keep organizations running and thriving.

Jeff La Porta, a purchasing agent at Harford County Public Schools in Maryland, says the competitive pricing offered through the Independent Stationers contract is a good fit and necessary measure for his business. La Porta's office manages purchasing for over 50 schools in Harford County. He relishes the savings to be had through this contract, and also sees it as a way to inject more healthy and fair competition into the market between smaller dealerships and larger office suppliers.

"Competitive pricing is really what we're about and strive for in purchasing," La Porta says. "A contract like this puts other companies on competition alert…. It tells them they need to become more competitive in their pricing and in their service delivery."

But, there is far more to be gained from a contract like this one than cost'savings for a single agency. There are larger ripple effects and benefits in communities across the U.S. that will be affected by this contract in some way. Understanding these larger ripple effects first requires an understanding of the role of small business in America and its critical impact on our economy.

In June 2009, California State University released a study about small business called, "The Economic Impact of the Small Business and Disabled Veteran Business Enterprise Programs on the State of California." In the study, Professors Sanjay Varshney and Dennis Tootelian asserted, "Small businesses are the lifeblood of the economy in the United States."

Here are a few compelling numbers and excerpts from the study:

• Small business accounts for 99.2 percent of all employer firms and drives the economic engine of the state.

• Based on data from the U.S. Census Bureau, the Office of Advocacy at the U.S. Small Business Administration documented that small businesses accounted for over 92 percent of the net new jobs creation between 1989 and 2003.

• Of the total 21.8 million jobs created between 1989 and 2003, small businesses under 20 employees created 18.6 million jobs, small businesses with between 20 and 500 employees created 1.5 million jobs, and large businesses and companies (with over 500 employees) created only 1.7 million jobs.

• The total net new economic activity generated by the state through contracting with SBs (small businesses) and DVBEs (Disabled Veteran Business Enterprise) through gross state output is approximately $4.243 billion, is at least $2.523 billion, and is as high as $6.408 billion."

Clearly, small businesses can have a substantial impact on local economies and government-issued contracts are critical factors affecting how small businesses succeed.

"Many jurisdictions want to protect their own and keep dollars in the community, and are using national cooperatives to benefit their local communities," says Cathy Muse, purchasing director for Fairfax County.

Speaking about the new office supplies contract she adds, "Everyone pays the same price under this contract. Participating agencies can take advantage of the pricing you can get from a national cooperative but benefit directly from a local supplier." She calculates that under the new contract her agency stands to save as much as $86,000 annually on the purchase of more than 3,400 items.

The strength and vitality these government contracts inject into small business is of paramount and critical success to communities, explains Muse, highlighting the need for "our suppliers to reflect our communities" and the importance of making procurement processes "more accessible to our small, minority-owned businesses."

In fact, Guernsey Office Products, Inc., a local dealer in Dulles (VA) has recently hired five new drivers, two sales representatives and an inside warehouse technician to support, in combination with other Guernsey resources, the Fairfax County Schools procurement department.

"As we look forward to additional account implementation in the community, we will be hiring at least another dozen employees anticipating about twenty new full time employees and eight additional vehicles. The process has been exciting and the potential of what we're doing here is enormous, we are proud to serve as the dealer selected for the initial U.S. Communities conversion," says David M. Guernsey President and CEO, Guernsey Office Products, Inc.

Of course, there are valid concerns and questions to consider. While the new contract gives smaller businesses an added edge over their larger competitors, do they really have the capacity to provide the same, timely level of service to clients?

Even while anticipating the benefits of the contract for purchasers, La Porta is firm on expectations. "We are going to expect the same level of service we've been accustomed to…" he cautions. "As usual we want to be able to go online, find a product, click a button, and have it delivered the next day. It's going to be important for this contract to maintain that level of service."

Even so, La Porta imagines the new jobs and functions in areas like delivery and order processing that could result from the contract in order to maintain that level of service, and how this will ultimately impact the community. "This model has potential for a lot of growth, as it grows, it will affect the local economy," he adds. "We want to see the business grow."

Muse offers some further assurance for purchasing agencies and local suppliers on the question of capacity. Independent Stationers is in turn backed by a group called United Stationers, a national network and wholesaler with leading edge capacity in distribution. "This means the local vendor doesn't have to do it alone," Muse explains. "Many local dealers have had long standing connections to United Stationers as a supply source and this contract will help to make United Stationers more visible to the buying community and their direct suppliers."

"Independent Stationers has been in business for 33 years – we started with four independent dealers. Over time, we've grown…now we're a network of over 280 dealers representing over 500 locations with as many as 1,900- sales people," says Janet Eshenour, director of marketing with Independent Stationers. "Many of the dealers are small business, women-owned, minority-owned and other socio-economic statuses, as well as family-owned businesses."

Eshenour explains how the very nature and practice of Independent Stationers lends itself to benefits for U.S. Communities participating public agencies. "We're a cooperative; we're dealer-owned; and we're continually adding new dealers. We go to the major suppliers like 3M or HP and negotiate with them so we get the best products and the best pricing for our members, which they in turn pass on in savings to purchasing agencies."

The new contract also offers the added benefit of increased personal interface and relationships between purchasing agencies and local businesses, Eshenour explains.

"Our dealers are entrepreneurs and have vast knowledge of the office supply industry and its products – they know it, live it, and breathe it. They offer exceptional delivery and customer service," she says. "They've been around for a long time and know their success depends on the level of service they provide."

The jobs and dollars that are kept in the community through small businesses, such as the ones represented by Independent Stationers, will certainly impact local economies, but the broader community stands to benefit in other ways too. According to Eshenour, many of the dealers are very active in their communities and sponsor or support local charities and initiatives "they want to do good for the community."

Public agencies have the opportunity to benefit from various contracts that offer savings on more than just office supplies. Other contracts cover photocopiers, playground equipment, furniture, even roofing. Working together with its national partners and sponsors, U.S. Communities is able to offer contracts that engage local dealers who pass along national manufacturer discounts to participating agencies. Visit the website www.uscommunities.org for more information, or contact Kathryn Kretschmer-Weyland 301-460-5251 or send e-mail to kweyland@usmayors.org, or contact Jeff Bean at 202-446-8140 or jbean@usmayors.org.

We would appreciate your city's feedback on your experience with the U.S. Communities program. Send any comments or best practices to Jeannie Fanning at jfanning@usmayors.org.