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Cooperative Purchasing-During a Budget Crisis
Value you can bring to your government entity
As a retired purchasing manager, I often reflect back on positive experiences with Cooperative Purchasing which has been around for conservatively 20-25 years and remain convinced today it is one of those golden opportunities to add value to your organization.
For the purposes of this article, let’s define value as offering something of significance to your government entity that has three goals:
- monetary attraction
- is process efficient
- increases the knowledge and expertise of the purchasing staff
During my last 5 years in public purchasing our annual budget planning meeting usually began this way: “we need to look in every department for a reduction in expenses, there is no alternative than to freeze hiring, and we need to find a more efficient method of doing business in all departments”. Inventories were going to be reduced which meant purchasing needed to find a way to quickly turn around the solicitation process. With fewer employees doing the same amount of work in every department they did not have time to write elaborate specifications for each solicitation. At the same time we did not want to sacrifice quality for the items we bought but we also needed to find a way to lower our purchase prices.
During a budget crisis, management often looks at its current software systems for improvement in processes. The Finance and Purchasing systems are great targets because they affect the heart and soul of the business. Upgrading however is time consuming as we know, to implement. This is a great opportunity for the Purchasing Department to step up and identify a process that can be implemented immediately and concurrent to the systems planning and implementation steps required when replacing or upgrading systems. The time in which we find ourselves offers us a golden opportunity to react positively to the budget pressure by utilizing the proven and effective method we know as Cooperative Purchasing.
As purchasing manager, both I and my staff were constantly looking for opportunities to lower our prices and save staff time to complete the solicitation, so we began to explore and utilize contracts authored by other government entities at the national and local levels. We did not sacrifice quality at the same time saved precious and few dollars in the budget and eliminated the time consuming task of managing vendor protests.
Using contracts that have already been competitively quoted and being used by several government entities, increase purchasing volume and result in lower prices compared to the prices a single entity will experience when the volume is significantly lower. At the same time cooperative purchasing will reduce the solicitation time and bring the product to the door step of your end user sooner.
After you and your purchasing department have become the expert in cooperative purchasing opportunities beginning with sites such as: US Communities, Western State Contract Alliance, and HGAC to name only a few (for many more Google government cooperative purchasing) when interviewing your end users you can identity existing contracts that will be beneficial for their use and add one more value to your departments expertise.
Once you have the knowledge and experience working with other cooperatives, the next step is to become a leader in your area by contacting surrounding counties, school districts or even states for the purpose of aggregating volumes for the same commodity or service on a more local scale. Everyone wins whether you take the leadership and author the solicitation process or you use the contract someone else processed.
There is no better time than now with our economic crisis to jump on the bandwagon and utilize the expertise of others or become a leader in your geographical area. The networking with peers and learning experience will make your level of expertise even deeper, more exciting, and a significant value to your entity.
- Don Olson
President, Professional Purchasing Services LLC. Retired after 10 years as Purchasing Manager for the Metropolitan Airports Commission located at the Minneapolis/St. Paul International Airport, 28 years with the State of Minnesota as Sr. Buyer and Acquisition Management Specialist, NIGP Master Instructor, NIGP Certified Public Purchasing Buyer, co-author of Contract Management ( First Edition) course material for NIGP 2000. Don can be reached at dholson@usfamily.net
