Every government agency leader eventually asks the same question about a significant purchase: do we have to do an RFP for this? Depending on the expense threshold, if the expected answer is yes, it will come months of requirements gathering, specifications, advertising, vendor questions, evaluation, and award. For a lot of purchases there is a faster path that still includes a competitive evaluation process and meets procurement requirements because another government agency has already done the solicitation process and awarded the contract. Other government agencies can then “piggyback” off of that awarded contract.
Vendors who sell to state and local government hear the other side of this all the time. Because of the time and effort to respond to RFPs, especially if they are uncertain of getting the business, vendors are often choosing not even to respond – creating yet another challenge for the agency. Or worse, they get asked by the agency to provide assistance with the RFP, potentially jepordizing the integrity of the process or the funding if it is coming from the federal government. In many of those cases the vendor already holds a fully awarded cooperative contract that permits the agency to get what they need faster and still satisfy their procurement requirements.
Two decisions in every purchase
Every purchase involves two decisions: what type of solution would be best to solve the problem and how it is going to buy it. Most of the attention goes to the first. The second usually decides how long the whole thing takes.
Your procurement policy sets the rules for that second decision. Below a lower threshold, staff can generally buy directly. Between the lower and upper thresholds, most policies call for some type of documented process, often three informal quotes.
Above the upper threshold, a formal solicitation is required, and the agency typically has three routes. It can run its own RFP, justify a sole source, or use an existing competitively awarded contract that already meets its procurement requirements. This third option is the one teams most often overlook.
It is worth pulling your procurement policy off the shelf to confirm what it says. Many policies have not been updated in years and statutory language that affects local policy may have changed, Your policy should outline authority levels, dollar thresholds, and the standard for award (lowest price or best value), information that shapes which contracting routes are open to you. In a lot of smaller agencies, procurement is one person, or a finance director covering it as other duties as assigned, and a formal solicitation means months of their time.
What cooperative purchasing is
Cooperative purchasing is thorough procurement conducted by or on behalf of one or more public agencies for use by others. The American Bar Association Model Procurement Code defines it in nearly those words, and most states authorize it in some form. In practice, a government agency writes the detailed solicitation, advertises it, evaluates the responses, and awards the contract, and it does it in a special way that provides for other government agencies to then buy off the same contract.
The time savings is incredibly significant. A conventional purchase moves from defining the need to writing specifications to releasing the RFP, receiving and reviewing proposal, and making the award to placing the order – and the solicitation process is typically where the months of time delay go. With a cooperative contract, the agency still defines its need and its specifications, validates that the chosen cooperative process meets its procurement requirements, and then places its order straight off the awarded contract.
The competitive solicitation process is still fully met. Agencies also get pricing shaped by the combined volume of thousands of buyers, a wide choice of suppliers, and in many cases the ability to keep working with a local dealer.
Agencies are using this route more every year. Deltek's GovWin put national cooperative contract sales at about $34 billion in 2016 and projected they would pass $93 billion in 2026.
Where Sourcewell fits
Sourcewell is one of the largest cooperatives serving public agencies, and it is a unit of local government itself. It was created under Minnesota statute, is governed by an elected board, and its staff are public employees. By its own figures it holds roughly 1,000 awarded contracts, serves more than 50,000 government, education, and nonprofit organizations, and sees more than $14 billion in purchases through those contracts each year.
Any government entity is eligible to participate with Sourcewell and access awarded contracts without other obligations.. Contracts may be awarded to both manufacturers and dealers/distributors. Agency purchasers can propose supplemental terms to meet local requirements, and full solicitation and contract documentation is available on the supplier's contract page on the Sourcewell website, which makes auditing and documentation easy.
There is a wide variety of categories that run from technology to construction. You can browse all of them through Sourcewell's contract search.
How to use a cooperative contract
The process is short, and most of it is work your team already does.
1. Read your policy and your state law. Confirm your agency can use cooperative contracts and whether your council or board needs to approve the investment at that dollar amount. Sourcewell provides comprehensive documentation and staff support to assist you with the information you will need to make compliance determination.
2. If your agency is not already registered, complete the free, easy online Sourcewell registration process.
3. Find the contract and review it. Search by category or supplier, then review the product offering, pricing (usually a percentage off list), terms, and solicitation documents.
4. Get a quote. Work directly with the supplier or its local dealer to scope the purchase under the contract terms. Awarded pricing is the most you will pay, so ask about volume or promotional discounts.
5. Paper it correctly. Put your Sourcewell account number and the supplier's contract number on the purchase order and keep the records together for audit.
6. Check the funding source. If federal grant dollars are involved, confirm the contract meets the federal procurement standards your grant requires before you buy.
A note for suppliers
If you sell to state and local government and hold an awarded cooperative contract in the category your customer is buying in, lead with it. When a customer asks for help drafting an RFP, ask first whether they know they can buy through the contract you already hold. That conversation can save them a full procurement cycle.
It is also the cleaner path for you. Many procurement codes can bar a firm that helped write the specifications from competing on them, and an awarded contract avoids that problem entirely.
Before your next RFP
Cooperative purchasing is one of the simplest ways I know to give an agency back time it would otherwise spend on process. Before your team starts drafting the next solicitation, spend ten minutes checking whether an awarded contract already covers what you need.
If you are weighing a purchase and want to talk through whether a cooperative contract fits, or you want to know who to call at Sourcewell for your region, email me at [email protected].
