Selecting the Right Cooperative Contract
A significant trend in public procurement today is the increase in both the availability and the utilization of cooperative contracts. I am sometimes asked: “Are there too many cooperative contracts?” What we should be asking is, “With all the cooperative contracts available, what criteria should I use to successfully determine which of those contracts provides the best value for my organization?”
The objective in choosing cooperative contracts is fundamentally the same as when a public sector organization conducts its own solicitations; that is, which contract provides the best value? As public procurement officials, we are aware there are many factors to consider in selecting a supplier. Important criteria not only include price, but also maximized competition, transparency of the solicitation process, the quality and value of the resulting contract and the performance of the awarded supplier. Over my 35-plus years in public procurement, I have used a checklist of three elements to consider in addition to price when determining which cooperative contract to use.
When you decide to use a cooperative contract, you are essentially substituting the soliciting/awarding agency’s procurement process, their decision-making and their reputation for yours. Therefore, it is paramount that the soliciting/awarding agency have a professional and respected procurement department. In some cooperative purchasing organizations, the contracting process is performed by a “non-profit” or “quasi-public” agency. In some cases the cooperative organization itself conducts the procurement process. One very important criterion for consideration is this – will the awarding agency significantly utilize the resulting contract for its own commodities or services? I like to call it “having skin in the game.” Soliciting agencies that do not utilize their own awarded contracts are not accountable to a department that will access the award. For example, you want to ensure a soliciting agency that awards a contract for fire trucks actually buys fire trucks for its own agency off that agreement.
Solution: Utilize cooperative contracts that have been competitively solicited, awarded and administered by a state, city, county or school district.
A primary objective for us as public procurement professionals is to guarantee and maximize competition. When excessive multiple awards are made, such as GSA supply schedule contracts, the benefits of competition are minimized. The use of multiple awards should be limited to the fewest possible number of suppliers to satisfy the needs of the agency. Multiple awards defeat the purpose of strategic sourcing. Excessive multiple awards limit competition and are in essence a license for suppliers to sell without effective competition. Therefore, there is no real incentive for the supplier to provide the best price.
Solution: Utilize cooperative contracts that encourage maximum competition by limiting multiple awards.
When evaluating a cooperative contract, it is important to confirm that all components of the procurement process are publicly and readily accessible. Ask yourself, “Are all the solicitation and award documents that are relative to the procurement process immediately available for my review on the Internet without a special membership or password?” That is, can an interested party, including the public, review the solicitation, contract documents and all amendments online?
Solution: Utilize cooperative contracts for which the solicitation and award documentation may be easily accessed and viewed.
Today’s public procurement professionals have the benefit of many cooperative contracts to assist them in effectively and efficiently meeting their agency’s procurement needs. The exercise of due diligence is still the responsibility of the procurement professional. However, it does not have to be laborious and overwhelming.
Wayne A. Casper, C.P.M., CPPO, is group director-West of the National Intergovernmental Purchasing Alliance (National IPA) and retired procurement director of the state of Arizona and the city of Tucson, Ariz.