November 14, 2012
Chicago Public Schools (CPS) will save approximately a half-million dollars in its waste hauling contract following action taken by the Chicago Board of Education Wednesday. The savings followed negotiations between CPS and the hauler, Allied Waste Transportation DBA Republic Services of Chicago, as part of the District’s cost-saving strategy.
CPS has taken a rigorous new approach to vendor relationships and contract negotiations – which mirrors successful private sector business strategies – to the benefit the District’s bottom line and to ensure that every available dollar is spent for the benefit of students and classrooms.
“At a time when we are coping with immense fiscal challenges it is imperative that we find every possible way of trimming our expenses in ways that do not impact student instruction,” said CPS Chief Executive Officer Barbara Byrd-Bennett. “We have been, and will continue to be, aggressive in looking at every contract and every dollar spent on goods and services to find savings wherever we can.”
The contract with Allied renews its current agreement to provide solid waste and recycling services for all CPS schools. The contact runs from Jan. 1, 2013 to Dec. 31, 2013, at a cost of $4.925 million. The 2012 contract amount was for $5.473 million.
The broader cost-savings strategy includes finding $31.5 million in identified and targeted contract savings districtwide. The approach involves working closely with every department and:
- Renegotiating existing contracts to secure additional savings wherever possible and systematically requiring cost transparency to find avenues for saving money;
- Creating increased competition by coordinating purchases with sister agencies to secure lower pricing; and
- Building stronger vendor relationships to further encourage cooperation in identifying smarter practices and cost efficiencies.
The Board also last month approved contracts with two firms for audit recovery services, to identify and ultimately recapture unpaid credits from or overpayments to CPS vendors.
In addition to the waste hauling contract, new procurement strategies, which end long-standing “business as usual practices” have already achieved positive impact on the District’s bottom line in many different categories such as:
- Electricity – CPS has renegotiated its electricity contract which was set at a fixed rate two years ago when the market was much higher. By taking advantage of today’s lower market price, savings are $2.7 million (based on last year’s volume) for FY13 and $4.4 million in total.
- IT Hardware – CPS has generated an estimate of $3 million in savings in IT hardware purchases, such as computers in FY13 by bundling its volume with that of the City of Chicago and Cook County.
- Milk Purchase and Delivery – CPS is saving $1 million by renegotiating a one-cent per carton price drop in its milk contract.
Chicago Public Schools serves 403,000 students in 681 schools. It is the nation’s third-largest school district.