Keep getting better: Cooperative procurement is evolving to meet government’s changing needs
This article originally appeared in the Q3 issue of Government Procurement.
When purchasing those typical goods that all governments use—office supplies, furniture, uniforms and computers—many rely on using an already solicited and awarded contract, called cooperative procurement. This contracting methodology drives savings in two ways—one, time and personnel resources, as the procurement process has already been done, and two, money, as many agencies combine their spend on one contract help drive pricing down for all. As cooperative contracts are becoming more prevalently used and adopted, new types of contracts are being awarded with expanded product lines, consulting services, roofing and construction or packaging commodities with value-added services. In essence, cooperative purchasing is evolving over time to meet the ever-changing needs of states, municipalities and educational institutions.
“Our members are rethinking procurement and cooperative purchasing” said Eric Frank, CEO of E&I Cooperative Services. “They are turning to us to meet a wide range of needs including complex cloud services, consulting services, education and training products, and more. Frankly, they are looking for more than just contracts. They want help with identifying opportunities for savings, promoting contract usage across their institutions, managing supplier relationships strategically on their behalf and generally acting as an invaluable extension of their organization. This is fantastic because it is pushing us to innovate quickly and broadly, and we see no end in sight to the innovations that will be needed to continue forward progress.”
Solving unique problems with cooperatives
With a reducing government workforce through retirements, attrition or budget reductions, many are looking to the vendor community to fill that resulting gap by providing necessary services to support purchased products. For example, if an agency purchases a security camera, they typically want the supplier to coordinate the installation of the camera to integrate with a computer security monitoring/recording program. Not all government employees have that expertise in-house. Thus, there is a growing need for the provider to lend their industry expertise, along with consulting or installation services, to support the purchased equipment.
BCI Burke, known for its playground equipment, notes that more agencies are requiring value-added features—such as design, to ensure that all ADA standards are met and the space is useful and valuable to people of all ages and abilities. Through its cooperative contracts, Burke often provides playground designers, in which the team works directly with the purchasing agency, to design a play space that considers everyone in the community. Sarah Lisiecki, CPSI, Burke’s marketing communications and education specialist, states, “the health and wellness of a community is impacted by the amount of recreation spaces within that community. Through play, children learn social, emotional, cognitive and communication skills while developing physically and learning to solve problems creatively.”
When Emory University set aggressive goals to source 75 percent of its food sustainably or locally and to divert 95 percent of waste from landfills by 2025, it turned to E&I Cooperative Services for assistance. Adopting E&I’s service contract with America To Go (ATG), the supplier collaborated with Emory to ensure that its 100 external caterers were following the same sustainability guidelines as its on-campus food service providers and embracing progress toward the same sustainability goals. Emory used ATG’s platform to specify standards and goals to caterers, assess compliance, highlight sustainability caterers to users with customized filters like “Zero Waste Providers,” and reporting through user-specific dashboards showing each users initiative spend towards Emory’s goals. Shortly after the launch, Emory saw a 55 percent increase in vendor participation, 54 percent of spend moved to sustainable vendors, and an immediate jump in sustainable spending after rolling out user-specific dashboards.
Suppliers expanding contracted capabilities
WESCO, a global supply chain solutions and electrical, communications and utility distribution company, has experienced a recent expansion of its cooperative contracts.
For a planned strategic upgrade to multiple wastewater treatment plants, a southwestern city chose to use a WESCO OMNIA Partners awarded cooperative contract for the phased project. The pricing, process and efficiency of ordering through a single cooperative contract rather than multiple non-integrated contracts, greatly streamlined the purchasing process.
However, during this upgrade, this large Arizona suburb uncovered a more pressing issue—the current critical power infrastructure was approaching the end of its expected maximum efficiency. Since this issue could cause potential imminent failure, an upgrade plan was required.
The open dialog between the agency, WESCO and the local supplier enabled each party to collaborate and offer the best solution to meet new performance and logistical requirements. Once the planned work was completely understood, the project size grew larger than the initial proposal, thus requiring additional city council review and approval.
The process required patience and close collaboration between the teams, creating a partnership beyond just a transactional relationship. By using a single comprehensive contract, the project could receive the exact products and services needed, without the city having to dedicate additional time and resources to go out for a traditional time-consuming bid solution.
Safeware, a national company providing public safety products also notes the changing dynamics of cooperative contracts. Safeware Director of Marketing Adam Spence acknowledges, “safety departments are now working together with neighboring entities in purchasing emergency and safety products, such as radios and communication equipment. Through the growth of nationally recognized cooperative vehicles, we have noticed other departments have started to pool their volumes behind these national contracts. It offers more aggressive pricing for orders from small to mid-size agencies, since the overall contract pricing is based on the annual collective volume of the contract.”
Suppliers bring industry expertise
Fort Mill School District in South Carolina was like many schools—they purchased hand sanitizer during the pandemic, choosing whatever products they could get their hands on. However, they soon quickly realized that students, teachers and staff were not readily using it, as it was thick, sticky and had an unpleasant odor. Plus, the alcohol content was too high, which increased the risk of exceeding the fire code alcohol limit.
“The safety and health of our staff, students and visitors have always been one of our top priorities,” said Jay Taylor, maintenance director at Fort Mill School District. After receiving complaints about the hand sanitizer, the team began to evaluate safer, more effective options.
Dawn Yeomans, Ph.D., hygiene sciences and partnerships senior advisor for GOJO Industries, inventors of PURELL Hand Sanitizer, states “The widespread availability of inferior and unproven products has led to concerns on safety, compliance and overall germ-killing efficacy.”
During the pandemic, the FDA temporarily allowed increased manufacturing of sanitizer to meet demand. However, concerns of contaminants, inadequate levels of active ingredient (ethyl alcohol or isopropyl alcohol), labels with false, or unproven claims have since surfaced, resulted in more than 240 products now banned by the FDA. Through GOJO Industries’ cooperative contracts of supported suppliers, consulting advice can be provided to ensure only products approved by the FDA, a task where most school purchasing teams might not have the same level of expertise.
Construction is the fastest growing contract opportunity
Emergency repairs and construction are projects that generally fall under direction of the General Services or Public Works departments. As those departments are learning more about the benefits of cooperative purchasing, they often ask, “can these contracts be used for construction?” And in many jurisdictions and regions, the answer is a resounding “yes!”
The City of Miami’s Office of Capital Improvements, in partnership with the Flagler Business Improvement District (BID) and the Miami Downtown Development Authority (DDA), is working to transform Flagler Street into an iconic, festival-style boulevard, reclaiming the street’s legacy as the vibrant retail and business core of Miami. The complex project is multi-faceted, including expansion of sidewalks, improved lighting and signage, public art displays, creation of new railroad crossing gates, upgraded drainage systems and installation of new power, gas and fiber optics utilities.
The $24-million project originally began in 2016 but faced numerous logistical challenges, including unknown underground utilities, delays and change orders. As a result, only half of a street block was completed within the first year. The City and stakeholders were not satisfied with the existing contract, so the project was put on hold in June 2017. The Flagler Street Task Force (FSTF) decided to search for a more efficient way to continue and complete the project, including researching construction-related cooperative contracts.
Upon completing that research, the FSTF recommended ezIQC, a Gordian job order contracting (JOC) solution available through a Sourcewell cooperative contract, which provides access to competitively awarded local contractors. JOC establishes the pricing up front and eliminates the need to bid each construction project separately.
The DDA and the City endorsed FSTF’s recommendation to use this cooperative contract, and selected awarded contractor, Lanzo Construction, to complete the remaining nine phases of the project. Designs for the project were finalized in April 2021, relying on ezIQC for construction procurement and Gordian’s experienced project managers to develop the scope of work and review all price proposals from contractors. If FSTF had recommended the traditional construction procurement route instead of JOC, that longer bid process would have delayed groundbreaking into 2022.
“Gordian is excited to partner with the City of Miami to revitalize and improve Flagler Street,” said William Pollak, president at Gordian. “We’re proud to provide comprehensive data, software and expertise that helps public servants maximize their resources and complete projects faster for their communities.”
Equipment purchases have gotten more complicated
Montgomery and Stewart counties in Tennessee formed a Solid Waste Authority to serve its combined population of more than 230,000 over a 2,100 square mile area. Known for its innovation and commitment to high standards of solid waste management, the Bi-County Solid Waste Management operates a Class I landfill, and two Class III landfills, with the latter exclusively handling construction and demolition waste. The 550-acre landfill conducts operations on 80 permitted acres, receiving an average of 1,000 tons of waste daily. The Class 1 section is projected to close in 2030, while the Class III sections will close by 2040. A new 33-acre cell currently under development will remain active until 2040.
Landfills are complex operations required to meet challenging regulations to minimize negative effects on the environment. In addition to meeting federal and state environmental regulations, Bi-County is also charged with increasing the amount of recycling debris it takes in each year. In standardizing its equipment purchases, Mark Neblett, executive director of Bi-County Solid Waste Management, states, “We’ve been able to buy several pieces of our Cat equipment through the Sourcewell cooperative contract. It is offered at a good price, and we hope to continue making future purchases in this manner.”
Acknowledging that there were problems throughout the years with equipment that can fail in this unpredictable environment, Neblett shares that working with a supplier to choose the right equipment has resulted in fewer equipment problems and repairs. While cooperative contracts are awarded at the manufacturer level, the actual servicing of that contract is done with local dealers—giving municipalities the ability to work with nearby local businesses. “When it comes to equipment maintenance, they have a local store not far from us, making it convenient for parts,” Neblett said. “And when we need a repair, they come here whenever we need them.”
Compaction of the waste is an important part of the operations and helps to lengthen the lifespan of a disposal site. In the past, the Bi-County landfill was achieving a compaction rate of 1,461 lbs. per cu. yd. But since it started using newer machines equipped with GPS, the landfill is now realizing a dramatically improved compaction rate of 1,703 lbs. per cu. yd. According to Neblett, “I think we gained an extra two to three years of life in that one cell because of the compaction rate we are now achieving.” Using GPS technology can allow compaction to be accomplished in fewer passes, thus improving efficiency and reducing fuel consumption costs.
Technology supports agency and supplier engagement
According to Eric Frank, “increasingly, E&I Cooperative Services sees our members turning to the portfolio to help solve ‘non-traditional’ problems. When the pandemic hit, members were hard-pressed to locate critical PPE. Prices and stock fluctuated on a daily (sometimes hourly) basis. E&I responded with more than just cooperative contracts. It launched a PPE Marketplace where members could go online, pre-order a variety of PPE products (i.e. masks, gowns, gloves, etc.) and services (i.e. COVID testing, contact tracing, etc.) The cooperative’s staff would do the legwork to find existing inventory and real-time pricing, facilitate members placement of orders and troubleshoot orders as needed.”
David Yarkin, founder and CEO of supplier ratings platform Procurated, said that one of the biggest trends in public procurement is the move towards modern consumer technology. “Purchasing leaders and their teams want to have tools at work that are as easy to use and powerful as the ones they use in their personal lives,” said Yarkin.
Government and educational leaders have written tens of thousands of reviews about suppliers on the Procurated platform. By reviewing them, purchasers can make informed decisions and select better suppliers with better performance track records. “Past performance is the best predictor of future performance,” concludes Yarkin.
Tammy Rimes is the executive director of the National Cooperative Procurement Partners (NCPP). She formally served as purchasing agent for the City of San Diego, the ninth largest city in the nation, and emergency logistics chief during the 2007 Witch Creek Fires. Under her leadership, the City consolidated its warehouse operations, centralized all purchasing and contracting operations, and moved to a more customer focused approach.