Grainger rolls out tools to help MRO buyers track stimulus spending

New ordering tools also let buyers track Buy American Act compliance

Susan Avery -- Purchasing, 12/1/2009 11:57:52 AM

Grainger has developed a set of new capabilities to help customers who receive funding through the American Recovery and Reinvestment Act (ARRA) comply with its requirements including those related to provisions of the Buy American Act. Customers who receive the funding may include purchasing professionals at manufacturing companies, construction companies and utilities. With the funding they may source through the distributor maintenance, repair and operations (MRO) products such as safety supplies, material handling equipment, HVAC (heating, ventilation, air conditioning) equipment, lighting and electric motors, among others.

"One of the areas that is top of mind for many of our customers is how to navigate the complexities of tracking their stimulus bill [ARRA] purchases," says Paul Kindzierski, vice president, Grainger Industrial Supply Sales. "We've made it easier to comply with the detailed reporting requirements for purchases across our broad product offering, enabling them to consolidate their MRO purchases with us and focus their resources on their core business."After the ARRA was passed in February, Grainger put together a cross functional team of its employees to determine the impact it would have on MRO buyers, Drew Fichter, customer business issues associate, told Purchasing in an exclusive interview."On the surface, it seems simple, but when you look at the scale at which the stimulus is being implemented, impacting a variety of industries and government agencies, it becomes extremely complex," he says.

According to the website Recovery.gov, the ARRA is intended "to provide a short-term jumpstart to the economy, with many projects funded by the $787 billion in recovery money, especially infrastructure improvements, expected to benefit the economy for many years." These long-term projects include investments in the renewable energy and energy-efficiency industries, government buildings and the nation's infrastructure.The act also created the Recovery.gov website to provide transparency to the American people about how recipients are using funds and to increase accountability helping guard against fraud, waste and abuse. To this end, recipients of the ARRA funds must report on their use including the amount of money received, the money spent, the scope of the project and the number of jobs created on a website that feeds into Recovery.gov. This process began in October.

Grainger's team focused on two issues it determined would impact customers who receive the funds and use them to purchase MRO products through the distributor: (1) transparency and accountability of the ARRA and (2) its requirements related to provisions of the Buy American Act. "These two issues put strict requirements on Grainger and our customers," says Fichter. For instance, he explains that under certain circumstances, customers are required to purchase products that comply with the Buy American Act and track how they spend the money.

To help customers track how they spend the ARRA funds on MRO products they purchase from Grainger, the distributor enhanced its ordering system to electronically flag a order that's purchased with the funds at the time it is placed, by phone, at a branch or online. In each case, the customer must identify the order as an ARRA or stimulus order. "By doing this, we can track a customer's ARRA spending with Grainger and at their request provide a report detailing their purchases which can ultimately help them comply with the quarterly reporting requirements," says Fichter. To comply with the provisions of the Buy American Act, the most important information buyers need is country of origin of the products they are purchasing, which Grainger has been routinely gathering from suppliers for years now, Fichter says.

The distributor makes country of origin information available in several forms: Buyers can obtain it when they let their service representative know they are making a purchase with the ARRA funds. They can also find the information in the product item description on grainger.com. And the supplier includes it in its response to RFQs (request for quotation) it receives from customers."All these measures are really meant to inform the customer and to provide them with critical information they need to make an informed decision based on the ARRA requirements," says Fichter, adding that the distributor is making every effort to inform customers on the Buy American provisions because there are some circumstances under the ARRA requirements where they are waived.

At the same time, Grainger is dedicating resources to training and educating both its employees and its customers on the ARRA. "Because we had a team that's been dedicated to understanding the act we have been able to leverage that knowledge when working with our customers," Fichter says. The company also has created a landing page on grainger.com (www.grainger.com/stimulus) that provides MRO buyers with additional information.