Providing Relief in Tough Economic Times

September 10, 2009

MARPLE -- Some municipalities and small businesses learned how they could capitalize on a $400 million state program to save themselves a bundle -- or potentially make one -- at a seminar Wednesday.

Hosted by state Rep. William Adolph , R-165, of Springfield and the Delaware County Chamber of Commerce, attendants at the Paxon Hollow Country Club were introduced to COSTARS, a joint purchasing program that allows eligible participants to buy everything from copiers to computers to vehicles and light bulbs without going out to bid.

Bruce Beardsley, COSTARS spokesman, said COSTARS members could save up to $82 million between bid process savings and savings realized through volume purchasing.

COSTARS is available to municipalities, public authorities, non-profit fire, rescue and ambulance companies and non-profit, educational or public health organizations.

Beardsley said the program began with 1,600 members and has grown to more than 6,400. It also has more than 700 suppliers ready for business.

"We're still getting an average of four new businesses every day," he said.

The sponsors spoke of the importance of hosting this seminar at this time.

"Any time, especially these days, we as an organization can provide value to our members and to the community … to promote business, it's a win for the chamber," Jeffrey Vermeulen, chamber president, said.

He credited Adolph with the ability to see economic issues from a legislative and a business owner's perspective.

"There's no doubt that the current economic conditions are creating significant challenges," said Adolph.

To rise to that, Adolph said businesses must work harder and his hope for the seminar was to provide the 50 attendants with some tools to do just that.

During the seminar, the majority of the focus was on the COSTARS program that allows participants to realize savings through piggybacking on state contracts or by perusing a database of suppliers and products set up just for members.

State agency contracts are usually written for a year and are generally serviced throughout the entire state, although municipalities can buy items through them.

For example, Beardsley said 1,400 municipalities have signed up for the state road salt contract this year and tires are available at 30 percent discounts.

Another measure is through COSTARS contracts themselves, which are written by the Pennsylvania Department of General Services specifically for COSTARS members and have no specific time limit.

Beardsley said a COSTARS member could purchase more than 75 percent of their commodity needs through this.

"The point is you can buy most of what you buy as a municipality or a school district through a COSTARS contract," he said.

Businesses pay an annual $500 fee to participate in the program that gives them access to hundreds of members.

"Most importantly, it allows you to sell quality, not just price," Beardsley said.

In addition, he said, payment is secure, as municipalities are required by law to pay for purchases within 30 days.

And, through quality service and product, the potential for business increases. "Hopefully more sales equals more profit for you," Beardsley said.

Seminar attendants brought varied motivations for coming.

Christopher K. Farmer of Office Furniture Plus, Inc. said he has customers that do business with the state and he wants to join those ranks. "I'd like to find more contracts in the state," he said.

The Aston furniture sales and installation business is celebrating their 18th anniversary next month and Farmer wants to capitalize on the economy. "We started in a recession so we hope that's good for us," he said.

Jeff Chadwick of Visual Sound wants to increase the business he's already secured as a COSTARS supplier. "We're just looking to see how we can do more," he said. "Maybe a green light will go off today."

Barry Powers said he was looking for ways to expand his UPS store business in Delaware County that already has locations in Media and Drexel Hill. "We're looking for additional funding and the banks have been less than appreciative," he said.

In the second part of the seminar, Gail Kronig of the Governor's Action Team said her organization helps provide low-interest loans, tax credits and grants for companies like Powers' that are looking to expand or delve into projects.

She also highlighted the tax credits available of locating in a Keystone Opportunity Zone, as in Chester, as long as certain requirements are met, such as increasing the number of employees by 20 percent within the first year of relocation.

FYI

Information on the Governor's Action Team can be found at www.newpa.com and the COSTARS program can be located at www.dgs.state.pa.us/COSTARS. Businesses looking to register as a COSTARS supplier should visit https://www.pasupplierportal.state.pa.us.