Cooperative procurement has grown exponentially in the past 20 years, now saving state and local government entities billions of dollars a year. And yet it remains an underutilized resource for many fleet managers who continue to get bogged down in the traditional approaches to spec’ing, bidding, and awarding contracts.
For those not familiar with cooperative procurement or for those who need a refresher, the process is simple. A government agency—state, city, county, school district, etc.—completes the required steps of the bid and procurement process. A contract is established for an item or group of products, and an award is issued to one or more vendors. Once the contract is in place, it can now be used by all government agencies throughout the country.
Using cooperative procurement, an agency in Lake Forest, Illinois, purchased a crack-sealing machine at a cost savings of more than $6,000 over the low bid received from a local vendor. There are thousands of examples of contracts like this that have been secured by government agencies using a similar approach.
Cooperative procurement truly is a win-win proposition. The fleet manager receives the equipment they need while the procurement department secures a greater return for their taxpayers’ dollars, thanks to the price advantage gained by “volume purchasing.” Best of all, cooperative procurement allows fleet managers to focus more on the job of running their operations instead of writing bid specifications for equipment.
The alternative to cooperative procurement is the time- and cost-intensive approach required of those who “go it alone,” something many are all too familiar with: interviewing potential vendors, advertising bids, responding to pre-bid questions, analyzing responses, and eventually making an award. In 40 years, I have yet to meet a single fleet manager who says they enjoy this process or who believes it’s the best use of their time.
Beyond the time involved, it’s also expensive. Mike Wenzel, former chief procurement officer for the state of Maine and past member of the National Association of State Procurement Officers, estimated that the total cost of procurement for agencies that choose this path can be as much as $10,000, and substantially more for complex purchases.
That was the experience of a Wisconsin transit agency that insisted on bidding for a transit bus lift rather than using the state contract. In the end, the agency received responses and spent $10,000 more than the discounted state contract price, resulting in a waste of procurement time and taxpayer funds.
Fortunately, every state now has laws to avail itself of a cooperative contract, but the procurement department still needs to familiarize itself with the specific state laws before registering with a contracting cooperative (co-op).
When you are ready to move forward, it is recommended that you perform your due diligence on any co-op you may want to join. Questions you may want to ask include:
- How long has the co-op been operating?
- Is there a fee to join?
- What procurement laws does the co-op follow in soliciting, evaluating, and awarding contracts?
- Is contact information provided to readily conduct more in-depth research?
- What is the level of customer service in response to questions, concerns, or requests for information?
Cooperative procurement can be used for a wide variety of purchases, but it is ideally suited for items that may only need to be purchased occasionally, such as when your garage expands or if the existing equipment is no longer able to service your current fleet (e.g., lifts, tire changers, and wheel balancers).
With cooperative procurement, fleet managers and procurement departments need not worry about the acquisition process turning into a virtual arm-wrestling match, as can happen. All contracts available through established co-ops are competitively bid and awarded and carry a full set of government terms and conditions the vendors must comply with for your shop as a government buyer.
For example, NASPOValuePoint.org has a contract titled “Vehicle Lifts and Related Garage Equipment” that is being used by 35 different states. The terms and conditions are clearly spelled out, and the contract itself has a mandate for guaranteed lowest government pricing.
With an increasing number of fleet managers and procurement officers across the country retiring or close to retirement age, more pressure is being placed on staffs to secure the equipment needed to maintain their fleets at a fair and responsible price.
Government-to-government procurement services hold the key to reducing the cost of goods and services by aggregating the purchasing power of public agencies nationwide. State Procurement Director Steve Berg summed up the benefits of cooperative procurement perfectly when he said, “Why reinvent the wheel when another state and its procurement staff have done all the work?”
Steve Perlstein is the sales and marketing manager for Mohawk Resources Ltd., a lift manufacturer based in Amsterdam, New York. He has worked in the garage equipment business since 1981 as one of the company’s founders. Perlstein is responsible for managing Mohawk’s multiple award schedule contracts with GSA, various states, and national government cooperatives.
