U.S. Communities

 

Cooperative Procurement Standards


Not all purchasing cooperatives are equal. Some purchasing cooperatives have failed to be structured in a way that provides maximum transparency and have no independent oversight to deter violations of professional public procurement laws, standards and ethics.

A simple checklist has been provided to enable you to determine if the cooperative contract you are considering accessing on behalf of your agency utilizes the processes, methods and structure to provide the best value and protection for you and your agency.

Cooperative Procurement Standards

Transparent Procurement Process:

(1) Was the soliciting entity an independent lead public agency that meets the definition of a political subdivision (county, city, school district, state, public higher education or special district)...

Transparent Procurement Process:

(1) Was the soliciting entity an independent lead public agency that meets the definition of a political subdivision (county, city, school district, state, public higher education or special district) and therefore meets the cooperative purchasing legal criteria in all states where cooperative purchasing is permitted?

(2) Was the development of the solicitation, evaluation of the responses and award determination all performed by public employees of a political subdivision that is separate from and independent of the cooperative organization?

(3) Did a National Evaluation Team comprised of public procurement professionals from multiple political subdivisions participate in the creation, evaluation and award process?

(4) Was the procurement process substantially similar to the process your agency is required to use?

Oversight and Accountability:

(1) Does the cooperative organization have independent and broad oversight of the program and its operations?

(2) Does the cooperative organization conduct independent third-party supplier audits to ensure contract compliance?

(3) Does the cooperative organization effectively manage its suppliers?

(4) Does the cooperative organization have adequate staff?

(5) How many staff per supplier does the cooperative organization have?

Public Agency Protection & Supplier Contract Compliance:

(1) Does the cooperative organization’s staff conduct quarterly performance reviews with supplier executives and LPA to evaluate performance and compliance?

(2) Does the cooperative organization’s agreement contain terms and conditions that require the supplier to provide their best government pricing to your agency? And does the agreement also require the supplier to demonstrate to you the value of the cooperative contract over other vehicles available from the supplier to your agency, including responding to your agency’s own solicitation?

(3) Does the cooperative organization have field personnel focused on educating public agencies on the benefits of the its program and resolving problems or concerns?

Final facts and questions to consider:

U.S. Communities Benchmark data: U.S. Communities has 35 contracts, 42 suppliers, 25 staff members and over $2B in participating agency spend.

  • Over $60M average per contract in annual purchases.
  • Almost $50M average per supplier in annual purchases.
  • An almost 1 to 1 staff to contract ratio.
  • 1.4 suppliers to each U.S. Communities staff.

Relevant Factors to Consider when determining contract value and cooperative oversight of supplier compliance nationally:

A recognized national cooperative organization has 100 contracts, 140 suppliers, just $600M in annual spend and a staff of 20 or less.

  • $6M average per contract in annual purchases.
  • $4.2M average per supplier in annual purchases.
  • 1 to 5 staff to contract ratio.
  • 7 Suppliers to each staff member.

Another recognized cooperative organization has over 240 contracts, over 300 Suppliers, just $700M in annual spend and a staff of 15.

  • $3M average per contract in annual purchases.
  • $2.3M average per supplier in annual purchases.
  • 1 to 16 staff to contract ratio.
  • 20 Suppliers to each staff member.

Questions to Consider:

If spend volume is a key driver in receiving lower prices and added value T&Cs, what kind of value does each of the above cooperative contracts offer?

What kind of national oversight and compliance of the awarded suppliers is possible with a ratio of 7 -20 suppliers for each cooperative staff member?

 
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Due Diligence

Legal compliance due diligence
There are a few but very important steps to protecting you and your agency prior to accessing a cooperative contract.

Contracting Entity
Determine if the entity that issued the solicitation, evaluated the proposals and awarded the contract meets YOUR state’s legal criteria for cooperative purchasing...

Legal compliance due diligence

There are a few but very important steps to protecting you and your agency prior to accessing a cooperative contract.

1. Contracting Entity

Determine if the entity that issued the solicitation, evaluated the proposals and awarded the contract meets YOUR state’s legal criteria for cooperative purchasing. An entity may meet the criteria in ITS home state but not meet your state’s criteria. The criteria vary widely from state to state.

A few examples of contracting entity criteria:

  • Wisconsin = Municipality
  • New Jersey = Contracting Unit
  • Pennsylvania = Public Procurement Unit

Each of the three examples is unique to the state and each has a different definition of what type of entity meets the legal criteria for cooperative purchasing.

In every state where cooperative purchasing is permitted, entities that are universally accepted as meeting the legal criteria are: counties, cities, public school districts, states, special districts and public colleges & universities.

If the contracting agency is not one of these standard political subdivisions it may not meet your state’s legal criteria.

For your state’s authorizing statutes for cooperative purchasing, please click here.

2. Procurement Process

Prior to accessing each individual cooperative contract it is vital to review the solicitation process and documentation. In many states the process used by the cooperative contracting entity is required to be “substantially similar” to the process utilized by the agency wishing to access the cooperative contract.

Procurement Process Check List

  • Was proper public notice provided? Location and duration of notice should be considered. If the resulting contract was intended to be marketed nationally, was it advertised  nationally?
  • Was the proper form of solicitation (RFP, ITB) utilized for the product or service being solicited?

    • i.e. Most states require ITBs to be used for soliciting construction contracts.

  • Were the specifications and evaluation criteria clear and unbiased?
  • Were the evaluation and award process conducted in compliance with generally accepted professional public procurement standards?
  • Were there any irregularities?

    • i.e. Additional awards made several months after the original contract awards were made. Evaluation scores changed several months after the initial evaluation and award.

  • How many responses were submitted in response to the solicitation? How many awards?

    • If there were several responses and all respondents receive an award, this also may be deemed non-competitive. This can be found in requirements for using some Federal Grants.

  • Review all vital documents related to the solicitation, evaluation and award of the cooperative contract.

    • Notice / posting / advertising of the solicitation
    • RFP document
    • Evaluation Tabulation
    • Signed Master Agreement / Contract
    • All addenda

 
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Cooperative Procurement Checklist

(1) Was the soliciting entity an independent lead public agency that meets the standard definition of a political subdivision (county, city, school district, state, public higher education or special district) and therefore meets the cooperative purchasing legal criteria in all states where cooperative purchasing is permitted?
               Yes________ No________

(1) Was the soliciting entity an independent lead public agency that meets the standard definition of a political subdivision (county, city, school district, state, public higher education or special district) and therefore meets the cooperative purchasing legal criteria in all states where cooperative purchasing is permitted?

          Yes________ No________

(2) Was the development of the solicitation, evaluation of the responses and award determination all performed by public employees of a political subdivision that is separate from and independent of the cooperative organization?

          Yes________ No________

(3) Did a National Evaluation Team comprised of public procurement professionals from multiple political subdivisions participate in the creation, evaluation and award process?

          Yes________ No________

(4) Was the procurement process substantially similar to the process your agency is required to use?

          Yes________ No________

(5) Does the cooperative organization have independent and broad oversight of the program and its operations?

          Yes________ No________

(6) Does the cooperative organization conduct independent third-party supplier audits to ensure contract compliance?

          Yes________ No________

(7) Does the cooperative organization have adequate staff relative to the number of awarded suppliers?

          Yes________ No________

(8) Does the cooperative organization’s staff conduct quarterly performance reviews with supplier executives and Lead Public Agency to evaluate performance and compliance?

          Yes________ No________

(9) Does the cooperative organization’s agreement contain terms and conditions that require the supplier to provide their best government pricing to your agency?

          Yes________ No________

(10) Does the cooperative organization have field personnel focused on educating public agencies on the benefits of cooperative purchasing program and resolving problems or concerns?

          Yes________ No________

For a downloadable copy of this cooperative purchasing checklist, please click here.   

 
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