GP-Oh! Big City savings with Group Purchasing Organizations (GPOs)

With an estimated $1.5 million in savings for 2023, using Group Purchasing Organizations (GPOs) to procure goods and services for the City of Lethbridge has had a significant impact.

“In really simple terms, using a GPO is like shopping at Costco,” says Tyler Kacsor, Supply Chain Manager for the City of Lethbridge, “Just like individual shoppers join Costco to access discounted prices on bulk purchases, businesses can join a GPO to leverage their combined buying power.”

Saving money isn’t the only benefit of a GPO. These groups manage the contracts with the vendors, negotiating pricing and make sure they are performing at a high level. They also provide advice and recommendations to make sure the City is being as efficient as possible. This all adds up big savings both in staff time and City purchases.

Lethbridge City Manager, Lloyd Brierley, has championed the use of GPOs for nearly 30 years, starting with the Saskatchewan Provincial Government and then introducing the practice at the City of Toronto. He brings a wealth of experience and knowledge around the history and evolution of group purchasing to Lethbridge having helped introduce this innovative procurement practice to municipalities across Canada.

“I have seen the effectiveness of GPOs in many different organizations and municipalities, and I was confident it would help us save dollars and staff time here in Lethbridge. I’m thrilled see those savings being realized for our City,” says Brierley.

Using GPOs doesn’t mean the City isn’t buying local. In fact, the City promotes joining a GPO to local businesses. This is a great way to work with the City as well as open up opportunities across the country. Many group purchases are with manufactures who then use local representative and service departments, ensuring local businesses are still generating revenue.

There are, of course, many things that can’t be purchased through a GPO and still need to go through the City’s procurement process. These contracts are issued through the City’s bids and tenders website which is also open to local businesses.

One GPO the City works with closely is Canoe. As the procurement branch of Rural Municipalities of Alberta, it’s the only not-for-profit GPO in Canada. Although it started here in Alberta, Canoe now does group purchasing across Canada.

“Canoe is driven by our members, for our members,” says Dave Dextraze, Manager of National Partnerships for the Canoe Procurement Group of Canada. “Our members identified that they needed help procuring certain items and we saw that we could assist with that. Group purchasing really is the most efficient use of tax dollars.”

For the City’s Fleet Services department, GPOs have been a big win. The City recently purchased a new Fire Truck and by prepaying using a GPO, saved $450,000 on just this one vehicle.

“The GPO process means we can get to market much faster,” says Rob Ulrich, Fleet Manager for the City of Lethbridge. “With the supply chain challenges we see within the industry, that is helping us get the equipment we need, as quickly as possible.”

The Fleet department estimates a savings just shy of $1.5 million since starting to use GPOs in December of 2021. This includes savings on everything from technician overalls to new pavers and waste collection trucks.

For the Parks department, GPOs have opened the door to new product lines and made the ability to access these options simple.

“For me, logging on to the website of a GPO company and having the ability to search a wide range of products and services saves a lot of time,” says Craig Richter, Parks Development Manager for the City of Lethbridge. “Every year we have several playgrounds to replace and for that program, this system works great and is something we will continue to use going forward.”

A GPO was also used when the City was looking to develop a new website in late 2022. Procuring a vendor from a GPO cut the cost significantly and allowed the project to start immediately.

“We were able to secure a high-quality vendor on contract within the same time it would have taken to write a request for proposals (RFP),” says Tara Grindle, Communications and Engagement Manager. “We didn’t have to wait to post the RFP, get the proposals, evaluate proposals and award the work, which can take weeks or even months. The GPO did all of that vetting for us so we could get to work right away.”

Canoe has standard contracts that are easy to use, has set pricing so there are no surprises and provides that piece of mind to the municipality that the appropriate tender process has already been done for them. Dextraze says this frees up the City’s procurement team to focus on the largest, most complex projects. 

There is no cost for the City to join Canoe. This particular GPO takes a small percentage from the manufactures and, as a non-profit, invests it back into their organization. They also provide training opportunities and additional support to their members.

Being good stewards of resident’s tax dollars is a critical priority for the City of Lethbridge, particularly in the face of significant inflation and a steadily increasing cost of living. Using GPOs to save time and money means there’s more funds available to support important community priorities in the future.

To learn more, visit the Canoe Procurement Group of Canada, the City’s bids and tenders website or see us in person at the Lethbridge Buyers Expo and Information Session on January 31. 2024.

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