The government buying process can be a notoriously complicated process – typically involving several layers of required approvals. But state, local and educational (SLED) entities can significantly cut this red tape by using a cooperative purchasing agreement.
Cooperative purchasing agreements allow SLED entities to direct purchase needed items – from frequent purchases like coffee and cleaning supplies, to larger investments like buildings and heavy equipment.
By joining a cooperative purchasing contract, even the smallest jurisdiction can get the purchasing power of larger entities.
These agreements generally work through a third‐party company such as National IPA, which provides a catalog of goods and services to the public sector. Pricing in cooperative purchasing contracts is transparent and non‐negotiable, allowing you to get the best value without soliciting bids for every single item you purchase.
Advantages of Government Purchasing Contracts
Cooperative purchasing contracts simplify the municipal construction process and allow entities to ultimately get the product and end result they want. There are several reasons why SLED entities use cooperative purchasing agreements.
Acquire the Best Solution for the Project Needs
The main advantage of cooperative purchasing agreements is the ability to get the best product or solution for your needs without leaving it to chance on an open solicited spec. Many open‐source bids are awarded based on lowest price, not best value.
Specifying the building you want, and working with that vender to find the best purchasing co‐op to procure the building through, will give you the best results before, during and after construction.
Direct Link to Supplier
By procuring through a co‐op, the design engineers and product supplier partner from the very earliest phases of the project through completion. This is especially important in construction – by partnering with one supplier, the design engineers are involved before plan drawings are even created.
This partnership gives both parties the opportunity to plan and prepare for the project, eliminating many of the potential risks and pitfalls that can happen during major projects. For example, amendments to construction plans that are required to meet new vendor standards or layouts may impact other areas of the project, causing delays to construction.
Providing the SLED entity and design firm with direct contact saves time, money and hassle by facilitating smooth communication. The supplier is ultimately responsible for the success of the project, resolving many of the scheduling challenges and breaks in communication that can take place on a large project.
Skip the Solicitation Process
In many straightforward projects where you will be self‐performing a lot of the work, purchasing through a co‐op will save the time and money that would be spent on bid solicitation.
The price posted in the purchasing co‐op is the final price. That price is not vulnerable to the mark‐ups added by general contractors during standard bid solicitation. The entity and the taxpayers know how much the project will cost before it is contracted.
Shop Like a Consumer
One of the biggest benefits of shopping with a cooperative purchasing agreement is the ability to shop like a consumer. Freed from the restrictions of shopping bids and weighing design alternatives, you specify exactly the building you need.
An effective municipal construction tip is to comparison shop apples to apples. With a cooperative purchasing agreement, government entities have that same freedom.
Disadvantages of Cooperative Purchasing for Government Procurement
Of course, there are disadvantages to purchasing contracts as well. There is a fee for using the purchasing contract. This fee, when purchasing a building, is a percentage of the building cost and comparable to other fees associated with construction.
There is also a learning curve inherent in using any new process. While this curve can be mastered the first time the entity uses a cooperative purchasing agreement, it does take time, energy, and resources to learn a new process and get buy‐in from everyone involved.
Your product vendor and representative from the purchasing agreement will provide guidance as you go and help you navigate through the system, and subsequent projects will get easier.
Purchasing through a co‐op is a more hands‐on transaction, and communication is critical from the planning phase through completion. Though prior construction experience isn’t necessary, understanding code and permitting requirements in your area will be important.
Want to learn more about cooperative purchasing? The Effective Building Construction and Planning for SLED Entities webinar has extensive information about cooperative purchasing contracts. Watch it now.