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At Buffalo's public housing agency, $36 worth of rock salt costs $53

Everything from batteries to rock salt to floor tile can cost more when the Buffalo Municipal Housing Authority is the buyer, a Buffalo News' analysis of BMHA spending found.

Sometimes the BMHA paid more than the City of Buffalo did – like when the housing authority paid $5 more for every garbage and recycling tote it ordered, as well as an additional delivery fee.

Sometimes the housing agency paid more than Erie County – like when the BMHA paid $18 more for each ton of rock salt it received and 40 percent more for each 50-pound bag.

And sometimes it paid more on the same day for the same item it purchased from two different suppliers – like when five faucets ordered from one plumbing store cost $58 each, while 12 more of the same item ordered from another local plumbing store cost $62 each.

There have also been times the BMHA paid more than a routine shopper would – like when the housing authority bought a 16-pack of AAA batteries for more than Target was recently charging for a 20-pack, The News found in its review of BMHA spending in 2017.

That's because the financially strapped agency's spending is usually done on a buy-as-you need basis – often without seeking competitive bids, The News found.

The BMHA spent about $750,000 in 2017 buying everything from office supplies and hardware, to plumbing and electrical supplies, according to BMHA purchasing reports.

In some cases – as with rock salt – a single BMHA purchase can represent hundreds of extra dollars spent. But typically, the individual purchases don’t represent a lot of money, although the scenarios happen over and over.

In response to The News' findings, BMHA Interim Executive Director Gillian Brown said he is considering a series of purchasing reforms that could include a more centralized system aimed at getting better prices and ensuring the housing authority's procurement process runs more smoothly.

That's in addition to plans Brown previously announced to shift some purchasing duties to three soon-to-be hired maintenance superintendents.

"I think in coming months we will re-centralize to a certain degree. It's gotten too spread out, too diffuse," Brown said of the authority's purchasing system. "If the pendulum has swung too far, we need to do something to remedy that. It's all rush, rush,  rush, and we're paying too much for stuff."

Brown said he also wants the BMHA to coordinate more with Buffalo and Erie County, to see if the housing authority can benefit from bulk contracts those agencies bid out. Already, he said, talks with the city helped the BMHA reduce the amount it pays for garbage and recycling totes.

"We were saying, 'Doesn't the city buy the same thing?' he said of garbage totes. "We found out they paid less, and the city said we can piggyback," said Brown, who was named to the interim post in March after Dawn Sanders-Garrett resigned from the executive director's job.

But other issues remain. Internal BMHA problems apparently led to the housing agency failing to bid out expired price agreements over the past year or two. Home Depot also stopped issuing store credit to the BMHA.

Brown learned of both issues when researching questions posed by The Buffalo News for this article. Both will be addressed, the interim executive director said.

BMHA doesn't buy in bulk

The Buffalo News in July reported that BMHA in 2017 paid $2.5 million to businesses for services ranging from landscaping to pest extermination, mostly in increments under $2,000 that allow the agency to bypass public bidding rules. The News analysis found the largest amount – $400,000 – went to GFY General Services & Cleaning, a new Batavia-based firm with ties to a housing authority employee.

Firm with ties to BMHA supervisor gets $391,000 from BMHA, mostly without bidding

The News’ follow-up analysis looked at the $750,000 in supplies purchased by the BMHA in 2017 for work done by agency employees.

BMHA has typically purchased office supplies – paper clips, envelopes, copy paper – on an as-needed basis through store catalogs and distributors. But in past years, it bought hardware, plumbing and related supplies in larger quantities, and stored them in warehouses, BMHA officials said.

The warehouse system was wasteful, said Modesto Candelario, the BMHA's long-time assistant executive director.

Items like window screens and faucet parts stored in the warehouses would sometimes become obsolete before they were used, he said.

Purchasing agreements expired

So for the past few years, BMHA has bought hardware, plumbing, electrical and related supplies on an as-needed basis as well.

As part of the purchasing strategy, price agreements were bid out for some commonly used plumbing, electrical and janitorial supplies, which housing authority staff purchased from the selected businesses throughout the year.  The unit prices hold throughout the life of the agreement, whether a single item was purchased or dozens are needed.

But BMHA officials acknowledge many of the agreements expired, apparently at the end of 2016, they said. Expired agreements apparently were overlooked because of staff cuts, and the BMHA failed to rebid them, Brown said.

Absent the agreements, housing authority purchases are governed by BMHA and U.S. Department of Housing and  Urban Development procurement rules. If a purchase exceeds $2,000 it must be competitively bid through the BMHA's central office.  Otherwise, no bids are required, and the purchasing is done at the individual housing developments by mid-level managers.

With items usually ordered in small quantities by the housing developments – and with no one coordinating the spending to see if similar orders could be aggregated and bid out – about 90 percent of 2017 purchases were below the $2,000 bidding threshold and not covered by a price agreement, The News found.

Paying more than shoppers

Some BMHA suppliers deliver, but not all. And sometimes items are needed quickly. So workers at the individual developments travel to pick up supplies, sometimes spending a couple hours a day shopping, according to several current and former BMHA employees.

Sometimes they go to the store with the best price or largest inventory, but other times they go to the closest business on the BMHA's approved vendor list, according to current and former BMHA officials and staff.

Examples identified by The Buffalo News of identical products purchased for different prices at different businesses – sometimes within the same week, or even on the same day – included tub and tile caulk, trash grabbers, kitchen faucets handles, faucet cartridges and floor tiles.

The caulk cost as much as 50 cents more depending on where it was bought in, while trash grabbers cost an extra $3.51, faucets an additional $4.15 per unit,  faucet cartridges an additional $7.38 per unit, and floor tiles $12.60 more per package, The News found.

"There are a lot of factors," Candelario said when asked about price discrepancies. "Maybe one has an item, and one doesn't. Sometimes we are pressed for time, we need it right away. Some deliver.

"We'd have to analyze it to understand. Everything is not 100 percent standardized," he said.

The BMHA policies, at times, have meant the housing authority pays more than routine shoppers do for some items, The News found.

For example, the BMHA last August bought a 16-pack of AAA batteries from ABC Hardware for $14.40. A 20-pack of the same item was recently selling for $12.99 at Target.

Can't buy at Home Depot

BMHA employees used to go to Home Depot for many last minute items – everything from batteries to work gloves to kitchen cabinets and floor tile. But that stopped in mid-2017.

Home Depot prices were often the best around for items the BMHA didn't have price agreements for, several current and former employees said.

Two packages of Armstrong floor tile the BMHA purchased from Home Depot in March 2017, for example, cost $32.40 each. Three more packages of the same tile bought a few months later from Sherwin Williams cost $45 per package, the BMHA records show.

Eighty-four door stops purchased from Home Depot cost $1.14 each. Another 224 purchased throughout the year from Len-Co Lumber and ABC Hardware ranged from $2.16 to $4.82 each, BMHA records show.

BMHA spent $28,376 on 239 purchases made at Home Depot from Jan. 1 though May 25, 2017, records show. But then the buying stopped.

Home Depot was no longer issuing BMHA credit.

BMHA management hasn't discussed the situation with Home Depot, but "from comments I've gotten, it's basically Home Depot is frustrated payments are taking some time, and they just discontinued," Candelario said.

Slow payments weren't the problem, a Home Depot spokeswoman said.

"We looked into this and there are not any buyers on their commercial card account which is why they can’t make a purchase," said Margaret W. Smith,  with Home Depot's corporate communication office.

The problem seems to be similar to the situation with the price agreements that were not rebid. When an employee whose name was attached to the BMHA's Home Depot credit card retired, no one was named to replace him on the account.

City, county get better deals

About 10 percent of items on the BMHA purchasing report appear to have been individually bid or covered by remaining price agreements.  But even then, the BMHA hasn't necessarily gotten the best price around, The News found.

The housing authority, for example, bid out and purchased 225 garbage/recycling totes in 2017. The cost of the totes, with shipping and delivery costs, was just over $13,000 – representing $48 per tote and as much as $13.50 in additional freight and delivery charges per bin,  bringing the per tote charge to as high as $61.50, records show.

The City of Buffalo – which orders thousands of totes annually – paid $43.10 per tote, including shipping, in 2017, according to city records. Under an updated contract, the 2018 city rate is $48.35, also with shipping included in that fee.

Brown said he learned months ago that the city was paying less than the BMHA for similar totes. After speaking with city officials, Brown said, he contacted the vendor, who agreed to give the housing authority a better rate. The BMHA now pays the same $48.35 tote rate as the city, plus a shipping fee reduced to $7  for a total of about $55 per tote in 2018, Brown said.

BMHA, unlike the city, pays an additional freight fee because it needs the supplier to deliver its totes to various housing developments when the shipment arrives, Brown said. The city, on the other hand, has it own storage facilities as well as trucks and staff to deliver totes, Brown said.

The BMHA is looking for other opportunities to save money through cooperative agreements with the city or Erie County, Brown said.

"Wherever possible we'd like to get economies of scale," he said.

One possible area, The News found, is with rock salt. BMHA in October 2017 purchased 22 tons of rock salt for $1,175  – or $53.40 per ton, records show.  The purchase was not bid since it was under $2,000.

The City of Buffalo, meanwhile, obtained its rock salt though a bulk contract competitively bid by Erie County. Under that contract, rock salt costs $35.83 per ton, according to city and county officials.

The BMHA also bought rock salt in 50-pound bags last fall. In four separate orders, none reaching the bidding threshold, a total of 637 bags was purchased for $3,573. Each bag costs $5.61.

Erie County, through competitive bidding, gets 50-pound bags of rock salt for $3.50 a bag under a contract that other local government agencies are welcome to request using, county officials said.

Given that the BMHA purchased over 600 bags, it could have saved $1,344 using the Erie County contract, The News found.

Rock salt is much more expensive when purchased by the bag than by the ton.

A BMHA employee familiar with the purchases told The News that the various housing developments are generally required to buy materials only for their developments, so most don't need to buy 22 tons at a time. Also, he said, BMHA doesn't have storage facilities for piles of rock salt, and doesn't have the trucks and equipment to handle the piles.

But BMHA records show the housing authority purchased more rock salt by the ton in 2016 than in 2017.

"I have no idea why we would have bought 50 pound bags, why we would pay $53 a ton instead of $35, but it won't happen again," Brown said.

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