Cooperative contracts help Denver stay ahead of the pandemic curve

Lance Jay, Chief Procurement Officer at the City and County of Denver in Colorado, says local governments are facing market and workforce challenges in COVID-19. “Goods and services are not readily available, and as a city we are seeing price inflation as demand across the globe far exceeds the supply.”

Jay notes that under normal circumstances, the global market regulates itself. “But we are now in an unprecedented situation, where there is neither an automatic correction of the markets nor global regulations in place to address market failures. And as COVID-19 is progressing very rapidly, new cases are being reported in many countries across the world, which makes the assessment of needs very difficult.”

Jay explains that cooperative procurement contracts have helped his procurement team efficiently leverage its limited available time. “Through maximizing the use of already solicited contracts rather than always going out to bid, our team can be more responsive and shorten the delivery time of obtaining products and services for the agencies of the City and County of Denver.”

Jay says cooperative contracts, like those offered through OMNIA Partners, have helped the Denver government meet its sourcing needs in these challenging times. “Contracts like these allow us as a city to identify and gather data on our agencies’ spend. This enabled us to gain visibility and deeper understanding into how they operate day in and day out, resulting in decreased procurement costs, improved efficiencies and the ability to forecast their needs.”

Cooperative agreements have yielded a variety advantages, Jay says. “By leveraging these agreements, it allows us to maximize best value procurements through suppliers we are already using such as Safeware, Graybar and The Home Depot Pro. In the cooperative agreements, suppliers must agree to specific terms and conditions before the contract is awarded.”

Jay notes that a key commitment in these contracts is that the supplier provides their best overall government pricing. “A city such as ours will not get better pricing from the supplier through our own contract or another cooperative and that is a huge advantage for us. As a city we purchase approximately $700 million in goods and related services annually, so any opportunity to maximize savings is a value-add for our stakeholders, which in turn benefits the residents of the City and County of Denver.”

It doesn’t take a whole lot to measure the value of using a cooperative contract, Jay explains. “It’s a simple equation. Time equals money. Vendors are bidding to provide goods and services to many instead of just one; they can afford to offer steeper discounts to the end-users of a contract.” Cooperative contracts, Jay believes, can also save metro governments such as Denver’s from having to maintain a large warehouse of supplies and parts. “Since the bid has already been completed for the products and services, many cooperative contracts offer next-day delivery terms, which enables our city agencies to keep less stock on-site and buy on a just-in-time basis. This allows the agencies to be more nimble, as most of the cooperative agreements we use do not require us to commit to exclusivity or to purchase a certain amount through the agreement.”

Cooperative purchasing allows local governments such as Denver’s to save precious time, Jay adds. He notes that it takes a lot of time and effort for local government procurement departments to develop and solicit a bid. “By using cooperative contracts, our City and County of Denver procurement professionals can focus on the execution of a contract rather than the process of writing it. Overall, cooperative contracts can save time and money.”

While the COVID-19 pandemic is upon us, Jay urges his fellow procurement directors to continue to make progress on digital procurement. “The world of purchasing in all facets has historically been paper- and in-person heavy. Yet during this pandemic, everyone from the largest cities to the smallest counties and everything in between has been forced to move things online, like vendor pre-bid conferences, online bid submissions and proposal review and scoring.”

He also advises directors to focus on the value and importance of their procurement teams. “All of this can’t be done without a strong team, so don’t forget them! Many leaders believe they have strong relationships with their people, but when push comes to shove, the quality of that relationship is average at best. Make the most of the relationships with your direct reports. It comes down to one simple four letter word: TIME.”

Jay explains: “Your willingness to carve valuable time out of your schedule and spend it with team members is the only way to create a real bond that shows your people you care about them through actions and not just words. We are fortunate to have strong team members in Denver, and it’s made a real difference in our ability to respond to this pandemic.”

He urges directors: “Take some time now and leverage technology. You should do a virtual team-building session or have a roundtable potluck. Make it fun and not all about work. You will be surprised at how engaged and more productive your team will become when they see you care about the human side of the business.”

Michael Keating is senior editor for American City & County and the GPN web site. Contact: michael.keating@informa.com