Walter Mencken 9:23 a.m., Oct. 10
Auditor Finds That City Is Overpaying for Supplies and Equipment
The City is shelling out more cash than it has to for supplies and equipment says a report from the City Auditor's office. In some cases, the City purchased goods that had been marked-up anywhere from 23.9 percent to 357 percent above the normal price.
Overpaying for supplies was exactly what the Mayor's Office was trying to avoid when it decided to enter into Maintenance, Repair, and Operation Cooperative Agreements directly with vendors. The agreements allowed the City to avoid the middleman and purchase products from the vendors, or so it was intended.
Instead, many of those vendors did not offer the correct products. They then entered into "sub-agreements" with other vendors, who hiked up prices.
In one example, a filter which once cost the City $8.61 before the agreements were made with the vendors, now cost $39.35.
"Many...are local companies where the City had historically purchased supplies," read the report. "The established agreements do not set agreed-upon mark-ups to be charged by the vendors when purchases are made through the sub-vendors. Consequently, instead of receiving the expected discount from the local vendors, the City is charged a significant mark-up."
The auditor suggests that the City's Purchasing and Contracting Department seek advice from the City Attorney's Office on ways to restructure the agreements with the vendors. If nothing changes, instead of projected savings of $255,000, the agreements are expected to cost more $792,000.
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