Purchasing consortiums gain momentum
Recession-stricken agencies are saving money through group purchasing organizations (GPOs), also known as purchasing consortiums. The groups help local governments get discounts on services and commodities they would not receive if they purchased them on their own.
Cities and counties that join GPOs may “piggyback” their purchases onto nationally awarded contracts for various items, including office and janitorial supplies, playground equipment and wireless phone service. “Cooperative purchasing has been around a long time, but now there’s a real push for it because of the financial difficulties all governments are experiencing,” says Tucson, Ariz., Deputy Director of Procurement Marcheta Gillespie, board member for the Herndon, Va.-based National Institute of Governmental Purchasing (NIGP), a membership-based, international, not-for-profit educational and technical organization for public purchasing agencies.
GPOs also ease the issuing of requests for proposals (RFPs) for competitive bids, which can involve about 140 to 150 hours of staff time and as much as 1,000 hours for source selection committees to evaluate RFPs, says San Diego County, Calif., Director of Purchasing Winston McColl.
From 2000 to 2007, the Lexington, Ky.-based National Association of State Procurement Officials‘ (NASPO) contract sales increased from $301.2 million to $4.6 billion, says Paul Stembler, cooperative development coordinator for NASPO and the Lexington, Ky.-based Western States Contracting Alliance. “Cooperative purchasing (contracting) is a lever,” he says. “It has the real potential to reduce costs.”
Let’s Make a Deal
With an annual $5.1 billion budget, San Diego County attracts a lot of interest from vendors. As a lead agency for the Brentwood, Tenn.-based National Intergovernmental Purchasing Alliance, it turns that interest into savings for smaller jurisdictions.
Annie Gentile is a Vernon, Conn.-based freelance writer.