Office of the State Treasurer


May 11, 2005

Kathy Hennessy
(609) 984-7110

“Buying Smart” Initiative Moves Forward

Treasury begins “Strategic Sourcing” effort on government purchases

 TRENTON -- Treasurer John E. McCormac announced today that the Department of Treasury is moving ahead with Acting Governor Codey’s efforts to save State and local governments money by buying smarter through a new “strategic sourcing” initiative.

 In December, Governor Codey announced that the Treasury Department would seek a consulting firm to develop a plan for strategically coordinating the purchase of equipment, goods and services for use by State agencies and local entities, noting that state government alone procures more than $1.5 billion in goods and services annually. Under strategic sourcing, joint purchasing strengthens government buying power, which ultimately could yield economies on purchase contracts for items ranging from computers and police cruisers to paper clips and business cards.

 “New Jersey state and local governments should be getting the best deal possible from vendors, especially when they both contract for the same things,” said Treasurer McCormac. “We need to fully leverage this combined buying power to generate maximum savings to the taxpayer.”

 Bearing Point of Radnor, Pa. has been retained through a competitive contract to perform a one-year study of New Jersey’s contract system. The consultant will analyze State spending, evaluate processes and procedures and recommend a course of action that will deliver measurable savings to all government partners.

 “This is a common sense, collaborative, smart approach to purchasing that recognizes how strength in numbers and volume can influence bargaining power,” McCormac said.

 Bearing Point has developed successful strategic sourcing programs for various public and private sector clients.

 The New Jersey State government purchases more than $1.5 billion worth of goods and services each year. This amount does not include contract purchases made by 1,800 local entities. The consultant will deliver recommendations designed to reduce overall state expenditures, as well as procurement costs for local entities, such as county and municipal governments, school boards and fire districts.

 Approximately 10 other states have implemented strategic sourcing programs in recent years.

>>Return to Previous Page