Government cooperatives’ future

As local governments continue to operate with fewer staff, those in charge of purchasing goods and services are continuing to use cooperatives as an efficient means of finding the right products at the right price.

In a recent survey of American City & County readers, 94 percent of the respondents indicate that they use cooperatives to purchase goods and services for their governmental entity, consistent with a survey only three years earlier.

In addition, 47 percent of the respondents say that they will increase their use of cooperative purchasing in the future. And, 80 percent say local suppliers should be involved and 44 percent wanted involvement of small, women-owned or minority-owned businesses. A total of 38 percent wanted more information on green compliance and sustainability.

Given these trends, government cooperatives are expected to continue to grow in dollar volume, perhaps with increasing industry oversight to ensure that the taxpayer’s dollar is being deployed effectively.

“It’s ever expanding,” says Dan Marran, the contracts and risk manager for Sparks, Nev. “I see it focusing on the service needs of the government community.”

The recent and potential future growth of cooperatives is based on a simple premise that as long as the contract complies with state law, procurement managers will not have to undertake their own time-consuming response to proposal process. Still, the process is largely unregulated, leaving government officials with the responsibility of performing their own due diligence to ensure that reliability of the cooperative agreement.

To assist in that task, NIGP: The Institute for Public Procurement, a Herndon, Va.-based industry group, is developing an accredited Cooperative program that will be launched this year, after receiving comments on its program through late 2014, says Brent Maas, executive director of NIGP.

“We are providing standards against which procurement professionals can differentiate the cooperatives,” he says. “There has been some confusion in the marketplace.”

Maas says the accreditation will look at how the cooperative is managed, how contracts are established and how the agent is managed. A list of 150 criteria have been established, identified by a task force of certified procurement professionals. The accreditation will carry a logo that shows that “It has met a high standard for professional practice,” Maas says.

Some procurement professionals are already looking forward to the final accreditation process as a means of helping procurement professional sort through the myriad of organizations that are offering cooperative agreements.

“I’m interested to see the value that this will bring by accrediting cooperatives for government use,” says Carolyn Ninedorf, purchasing agent for Dade County, Wis. “It will help establish the quality of the contractor and provide more information.”

In addition to the effort by procurement professionals to establish standards for cooperatives, others in the field see changes among the providers to offer new products and services to meet the ever-increasing demand.

Angelo Salomone, purchasing administrator for Coral Springs, Fla., anticipates that more websites will be developed that aggregate the pricing, which will make purchasing from cooperatives even easier. An advocate for local cooperative purchasing, Salomone says that local websites provide big benefits. “They save time and effort,” he says.

Marran looks ahead to more specialized cooperatives, tailored to specific needs of government agencies.  “I believe that we will be able to gain better pricing on more specialized equipment,” he says.

While most cooperative purchasing has worked well, certain areas of piggybacking on contracts have come under federal government scrutiny, especially in purchasing of transit equipment with grant dollars, says Joseph Procop, procurement manager for the Central Arkansas Transit Authority.

In the past, some local governments used federal dollars to order larger quantities than they needed and then re-selling the unused portions to other governments. Regulations now require the purchased amount to be close to the stated need, while still allowing small portions of the unused contract to be offered to other communities. “The quantities can’t be unreasonable,” he says.

Other purchasing officials believe that local governments in a region will begin working more closely together to bid contracts locally on certain items, such as fuel oil. John Holmes, the buyer for La Plata County, Colo., says that the advantages of group purchasing are becoming more and more apparent.

 “I foresee going to more cooperative purchasing,” says “As governments increase their buying power, they are saving dollars.”

Robert Barkin is a Bethesda, Md.,-based freelance writer.

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