Minutes of the Annual Meeting of the Power - New York Power ...

April 24, 2007
Procurement representatives also worked closely with, and were members of, the National Minority
Business Council, the Association of Minority Enterprises of New York, the New York/New Jersey
Minority Purchasing Council, the Long Island Hispanic Chamber of Commerce, Professional Women in
Construction and the African American Chamber of Commerce for Westchester and Rockland Counties, to
name a few.
(4) Review of Inventory Practices and Relocation of the Niagara Warehouse
The Authority is also planning to move the Niagara warehouse to a new location due to the recent
agreement with Niagara University, and a new warehouse will have to be constructed. In addition, there
are other opportunities to review and optimize inventory levels and on-time deliveries, and review the
potential for bar-coding or Radio Frequency Identification Tags (RFID) technology, Vendor-Managed
Inventory (VMI), and automation of Asset Management. An internal team, referred to as Parts Inventory
Review Team (PIRT), has been assembled consisting of Procurement, Materials Management, Operations,
Asset Management, Information Technology, and Controller’s staff. A scope of work was developed and
competitive proposals were reviewed to award a contract to a qualified consultant to assist PIRT in
reviewing the foregoing potential opportunities. A contract award was made in October 2006, to the low
qualified bidder, Logistics Consulting Inc. (LCI) of York, Pennsylvania, to act in the consulting role to
PIRT. LCI visited the various warehouses at our operating facilities and reviewed data regarding inventory
and purchasing transactions. Initial recommendations regarding potential improvements in purchasing
consumable and fast-moving stock, and replacement of the Niagara warehouse have been formulated. LCI
has been requested, as extra work, to review various processes relating to requisitioning, purchase order
and contract initiation and warehouse activities to identify potential efficiency improvements for such
processes. A report of these recommendations is expected in May 2007.
ANNUAL REPORT - 2006 PROCUREMENT CONTRACTS (Exhibit “A-3”)
The Annual Report includes specific details of procurements of $5,000 or greater awarded since January 1, 1990 that
were active in 2006. There were 2,268 such contracts with an estimated value of more than $3.6 billion, which also
includes fossil fuel and corporate finance expenditures.
Total procurement expenditures in 2006 exceeded $753 million. This included more than $500 million for the
purchase of fossil fuels.
Approximately 58% of the contracts active in 2006 were closed in 2006.
As noted in Attachment II:
Approximately 7% of these contracts were for construction work;
More than 53% were for the purchase of equipment and commodities;
More than 11% were for consulting contracts (e.g., engineering, design, specialized analysis); and
Other services, such as technician work and contracted personnel, accounted for 29%.
It should also be noted that while approximately 52% of the total number of 2006 non-fuel contracts covered by the
Report exceeded $25,000, the total value of those contracts was approximately 99% of the total non-fuel
expenditures.
Attachment III indicates that, based on the total value of the contracts included in the Annual Report, approximately
98% of the total dollars expended (including fuels and corporate finance) were for contracts that were competitively
bid. In terms of the numbers of contracts processed (Attachment IV), approximately 76% were competitively bid
and 24% were sole source awards. Major reasons for the sole source awards included the purchase of spare parts
and services from original equipment manufacturers and procurement of services on an emergency basis and from
proprietary sources.
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