HOW THE STATE CAN LEVERAGES PURCHASING VOLUME AND RESOURCES Cooperative Purchasing

What is cooperative purchasing?  Means a procurement conducted by, or on behalf of, more that one public procurement unit (§ )  Realistically this means that when one organization joins with another to solicit a requirement Who can participate?  Anyone can participate in cooperative purchasing. One party to the cooperative effort must be a public procurement unit.  State Agency  Political Subdivision (cities, towns, counties, school districts)  Non-profit corporations

Cooperative Purchasing What is cooperative purchasing?  Means a procurement conducted by, or on behalf of, more that one public procurement unit (§ )  Realistically this means that when one organization joins with another to solicit a requirement What is “piggybacking”?  “Piggybacking” is when an organization joins an existing contract to satisfy their requirements.  Realistically this means the contract is already in existence and you do not conduct a solicitation  This can be an issue for your vendors

Cooperative Purchasing Why would the State bother with cooperative purchasing?  Staffing shortages  Workload volume  Expertise  Volume pricing What else is so special about cooperative purchasing?  The cooperative purchasing agreement can be written so the parties can share resources ( warehouse, capital equipment, people)  Share technology (ProcureAZ) – reimbursement possible

Cooperative Purchasing What organizations are out there?  GSA  Mohave Cooperative  NJPA  National IPA  NASPO Valuepoint  PCA  SPO  TCPN  US Communities How do you choose?

Cooperative Purchasing It’s a business decision  Understand your need – (One time or long term)  Find out if you organization has rules for cooperative purchasing  Find a cooperative organization with a contract you want to use  Read the cooperative agreement  Remember this isn’t an attempt to avoid the procurement process. The agreement/organization should allow you to feel comfortable that the intent of public procurement has been met What else?  Pay attention to any fees and who pays them  Conduct your due diligence – we still must be transparent

Cooperative Purchasing How does the State do cooperative purchasing?  We are a cooperative purchasing organization  We are a cooperative purchasing user As a cooperative program  We create statewide contracts for use by cooperative program members by adding language allowing entities other than the state to use the contract  We allow entities interested in our contracts to sign a cooperative program agreement  Avoid “cherry picking” the best price for a few items  Agree to submit purchasing records when asked for audit purposes  Abide by the terms and conditions of the audit  Agree that the vendor will remit 1% of the purchase price to the State for program administration

Cooperative Purchasing As a user of cooperative contracts  New rules were put in place in February of this year  Increased access to more than just NASPO Valuepoint and GSA  Allowed for piggybacking – with limitations (25% or $500,000)  Each contract is a business decision  Consideration is given to staff availability  The possibility of achieving a better price  Is there a need  If a state contract already exists, state agencies cannot use a cooperative  If a state contract does not exist due diligence must be performed

Cooperative Purchasing Due diligence  If an agency wants to lead a cooperative agreement, the State Procurement Administrator must approve (R )  Ensure the each cooperative member is responsible for their own requirements (payment, acceptance, testing, etc.)  Vendor performance issues are not collectively managed  The State has authority to exercise its own rights and remedies  State contracts cannot be used for leverage to gain additional concessions  The State can cancel any cooperative agreement for failure of a cooperative member to abide by the guidelines

Cooperative Purchasing  If piggybacking onto a cooperative contract (R )  Contract must have been awarded through a competitive process  Documentation is available to validate this  Bidders list  Solicitation with evaluation factors  Multiple offers received  Bid tabulation  Cooperative contract language included  Cost determined to be fair and reasonable  Cooperative agreement terms and conditions are acceptable  Vendor is willing to extend the cooperative price to the agency  Value is 25% of the initial or estimated value of the contract or $500,000 whichever is less

Cooperative Purchasing QUESTIONS???