Cooperative Purchasing HOW THE STATE CAN LEVERAGES PURCHASING

Cooperative Purchasing 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 (§ 41 -2631) 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 (§ 41 -2631) 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 (Procure. AZ) – 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 2 -7 -1002) � 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 cancel any cooperative agreement for failure of a cooperative member to abide by the guidelines

Cooperative Purchasing If piggybacking onto a cooperative contract (R 2 -7 -1003) 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? ? ?