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PROVINCE OF BRITISH COLUMBIA Eighth Annual Report of the Purchasing Commission January 1st, 1950, to… British Columbia. Legislative Assembly 1951

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 PROVINCE OF BRITISH COLUMBIA
Eighth Annual Report of the
Purchasing Commission
January 1st, 1950, to December 31st, 1950
VICTORIA, B.C.
Printed by Don McDiarmid, Printer to the King's Most Excellent Majesty
1951  Victoria, B.C., January 10th, 1951.
To His Honour Clarence Wallace, C.B.E.,
Lieutenant-Governor of the Province of British Columbia.
May it please Your Honour:
Herewith I beg respectfully to submit the Annual Report of the Purchasing Commission of the Department of Finance for the period January 1st, 1950, to December
31st, 1950.
H. ANSCOMB,
Minister of Finance.
The Honourable Herbert Anscomb,
Minister of Finance, Victoria, B.C.
Sir,—We have the honour to submit the Eighth Annual Report of the Purchasing
Commission, covering the period January 1st, 1950, to December 31st, 1950.
R. H. SPECK,
Chairman.
R. M. BURNS,
Member.
C. D. CAMPBELL,
Member.  Eighth Annual Report of the Purchasing Commission
For the Year Ended December 31st, 1950
Since the last Report, specifically since April 1st, 1950, a new Commission has
assumed office. With the retirement of the former Chairman, C. B. Peterson, who
had been in large measures responsible for the original organization of the Commission,
the other members, E. W. Griffith and J. M. Stewart, submitted their resignations. The
former Chief Buying Agent, R. H. Speck, was appointed Chairman, with the Assistant
Deputy Minister of Finance, R. M. Burns, and the Chief Architect, C. D. Campbell, as
members.
The Commission, realizing that in the stress of war and postwar conditions it had
not been possible to give full attention to organizational detail, availed itself of the
opportunity made available by the Minister of Finance to have a full survey made by
a firm of management engineers—Stevenson & Kellogg, Ltd. This firm conducted a
thorough investigation of all aspects of the Commission's activities and made several
important recommendations, which have the effect of more fully implementing the
statutory responsibilities of the Commission.
We consider the report a valuable contribution to the improvement of the Commission's organization, although it can logically be maintained that the survey at times
does not perhaps give full weight to the difficulties of administering a widespread and
loosely integrated organization of very diverse functions. We feel, however, that the
general implementation of the report will go far in effecting a general saving to the
Government through improved purchasing and reduced departmental clerical costs,
although on the surface additional expenditures will be required in the Commission
itself.
In summary, the recommendations in the report were:—
(1) That the Commission assume full control of all Government purchasing
• as soon as properly organized, including that presently carried out more
or less independently by the King's Printer, Text-book Branch, Provincial Library, and Public Library Commission.
(2) That regular meetings of the Commission be held at least weekly.
(3) That greater attention be given to encouraging planning and co-ordination of requirements in the departments.
(4) That, where possible, all purchase orders be pre-priced, and that broadened purchasing activities be undertaken in Vancouver where a majority
of the suppliers are located.
(5) That greater attention be given to specifications and standards.
(6) That the Purchasing Commission assume responsibility for shipping
routes and shipping charges.
(7) That unit price records be kept.
(8) That stricter control of "emergency" purchasing be exercised.
(9) That purchasing procedures be simplified, and that the Purchasing
Commission undertake the preparation of all vouchers in payment of
invoices.
(10) That statistical reporting be simplified.
(11) That Langford Warehouse be used as a " scarce supply " depot and for
disposal of surplus material, but not as a general warehouse.
(12) That greater control be exercised over departmental stores by the Commission. A A 6 BRITISH COLUMBIA
(13) That simplification of methods in inventory records be considered in
future cases.
(14) That the structural organization of the Commission be reconstructed and
clarified.
(15) That the Chairman assume full administrative responsibility.
(16) That careful attention be given to staff selection and training.
. These recommendations have, in large measure, had the approval of the Commission and the Honourable the Minister of Finance. Organizational and procedural
changes of considerable importance have been effected or are in the planning stage.
All changes affecting outside agencies have been discussed with the appropriate departmental officials, in order that the changes may cause as little disruption as possible.
Changes are being introduced gradually and, we are sure, will soon be of very evident
advantage to all concerned.
It has always been the aim of the Purchasing Commission to provide a service to
operating departments which will enable them to receive greater value for each dollar
spent. Every effort is made to satisfy the particular wants of the operating departments,
but also it is necessary that the proper principles of centralized buying be followed.
There is much to be done in educating departments to proper provision for their future
requirements, and we hope to assist in this, as well as to aid by the development of
standards and specifications which are sadly neglected at the present time.
We are by no means satisfied that inventory control in the departments is in a
satisfactory state, nor are the responsible officials in the departments satisfied. It is
our hope that, as our new organization develops, we will be able to extend further our
efforts in this line.    It is our feeling that large savings are available through this.
There is much to be done. We earnestly solicit, and feel sure we will receive,
co-operation of all concerned in enabling a first-class purchasing organization to be
maintained.
It appeared, during the first half of 1950, that the economic situation was beginning
to stabilize, and that we could look for a levelling-off in inflationary tendencies. We
are faced again, unfortunately, with actual and potential shortages in many lines,
particularly in metal products, with consequent rising prices. We cannot escape the
conclusion that many shortages and many price increases are artificially induced, both
by panic buying and by hedging by suppliers against possible future price controls. It
is a difficult task to assure a proper supply of goods and materials for Governmental
purposes without being a contributor to these artificial shortages by stock-piling on our
own account.
It would appear most probable that we are in for a period of high prices with
controlled consumption, either by natural processes or by government control. In any
event, the difficulties of operation appear likely to increase in the months to come.
The " Purchasing Commission Act " places very heavy powers and responsibilities
upon the Purchasing Commission. Many of these, due to unavoidable circumstances,
have not been assumed. It is now our hope to be able to undertake the requirements
of the Act as fully and as rapidly as conditions logically will permit. The staff of the
Commission has worked under definite handicaps, but with the organizational improvements and increased physical accommodation, we feel sure it will perform even more
efficiently the duties so willingly undertaken in the past.
STATISTICAL RECORDS
Statistical records were maintained under the following headings, which, for
information, are recited herewith:—
A. Competitive.—On   contract,   quotation   (written  or  verbal),   or  prices
awarded on, and governed by, previous quotation. REPORT OF THE PURCHASING COMMISSION
AA 7
B. Restrictive.—Specified commodities sold exclusively by a particular manu
facturer, wholesaler, jobber, or agent.
C. Controlled.—Includes set prices where no advantage accrues in calling for
competitive tenders on commodities sold at controlled prices.
D. Non-competitive.—Requisitions issued without stated prices and controlled
by checking or test-checking prices when invoices are submitted.
E. Retail.—Includes semi-retail, or where prices are greater than might be
secured from manufacturer or wholesale (local purchases).
F. Emergency.—(1) Retail.    (2) Wholesale.
Comparative figures for the fiscal years 1946-
are set forth hereunder:—
47. 1947-48, 1948-49, and 1949-50
1946-47
1947-48
1948-49
1949-50
A. Competitive-
B. Restrictive	
C. Controlled	
D. Non-competitive-
E. Retail 	
F. Emergency—
(1) Retail..
(2) Wholesale-
War Assets Corporation-
Totals	
$1,224,889.62
1,913,511.26
697,980.71
1,345,051.80
99,687.91
555,649.05
227,049.05
$1,797,962.96
3,171,273.11
1,017,470.76
2,046,112.62
151,388.03
301,377.17
472,359.06
98,693.42
$2,390,495.25
4,539,397.45
1,976,647.61
3,399,999.87
153,047.50
309,999.39
620,584.50
23,374.78
$2,559,521.99
4,076,441.42
879,601.05
4,025,593.59
233,042.83
274,451.21
788,211.38
$6,063,819.40
1,056,637.13
$13,413,546.35    |    $12,836,863.47
Number of purchase orders issued-
27,163
_]_
30,390
33,315
37,306
A study of these records indicates that some success has been achieved in increasing
the amount of competitive bidding. However, it is desirable that the volume of orders,
particularly relating to Items D, E, and F, be greatly reduced. It is our belief that
steps presently being taken to provide and train additional staff and to reorganize
procedures will have the necessary effect. It is also hoped that a saving will result with
the increase of the local purchase limit to five dollars. The number of purchase orders
will be reduced, with consequent administrative savings, as in these small purchases the
amount that can be saved by the Commission in purchasing is far outweighed by the
costs of processing the orders.
victoria, B.C.
Printed by Don McDiarmid, Printer to the King's Most Excellent Majesty
1951
345-151-4650 

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