OKLAHOMA CITY (Feb. 8, 2010) — State agencies could potentially save as much as $12 million with recently-completed and ongoing contract negotiations made possible by purchasing reforms put in place in recent years, House committee members were told today.

Randy Ross, the deputy director at the Department of Central Services testifying before the House Government Modernization committee today, said the agency is continuing to negotiate new contracts for commodities utilized by state and local agencies.

Ross said in total the expected savings to the state from new contract negotiations is set to be as much as $12 million, with local entities taking advantage of those contracts set to save as much as an additional $7 million as well.

DCS officials explained that the savings also impact local government entities, which will also realize several million dollars of savings by taking advantage of the state's newly-negotiated contracts.

"Tangible savings are now being realized at state agencies due to the purchasing reforms we passed last year," said Rep. Jason Murphey, R-Guthrie and chairman of the committee. "These savings are coming online just in time to provide state and local government with relief as they downsize to meet decreasing revenues."

Purchasing reforms put in place over the last three years have given DCS additional tools to negotiate the best products at the lowest price for the state. The department has also been able to streamline purchasing orders and the receiving of bids with the use of modern technology, which has allowed the department to dedicate more time to negotiating contracts.

Ross highlighted six newly-negotiated contracts that led to a savings of 13 percent, or an estimated $4.7 million savings to the state. One food contract mentioned saved $392,000 in the first quarter alone, and is expected to save $1.2 million annually. Also highlighted was a copier contract, which is currently being renegotiated with the hopes of saving as much as $4 million annually.

If school districts, higher education and county and municipal governments started to use many of the renegotiated contracts, the savings would be even greater, Ross said.

In the near term, Ross said the state will save at least $10 million with the new contracts, but as more contracts come up for renewal in the coming years, the additional savings possibilities are significant.

Many of the reforms were first suggested during a 2007 government modernization interim study, which suggested that if the state utilized technology and purchasing best practices, the state could save as much as $75 million annually.

Rep. Ken Miller, chairman of the House Appropriations Committee and chairman of the 2007 interim study, said efforts to modernize government have been successful and must continue.

“When we first began examining government modernization, we quickly realized that government could be performing better,” said Miller, R-Edmond. “It is encouraging to see that our dialogue and efforts over the past three years are already leading to tangible results for the taxpayers.”

Government modernization remains a top priority for House Republicans this year.

“We must be vigilant in finding savings and efficiencies in government where possible, especially given our current budget shortfall,” said House Speaker Chris Benge, R-Tulsa.

To view a video clip of Rep. Murphey discussing the savings as a result of purchasing reforms, go to: http://www.okhouse.tv/ViewVideo.aspx?VideoID=223