Cooperative purchasing: using contracts other agencies have already competed

Reference article · 2 min read

Running a formal solicitation is expensive and slow. Cooperative purchasing lets an agency use a contract that another public entity already competed, on the principle that the competition has already occurred. Piggybacking is the informal term when one agency uses another agency's contract directly.

Common sources

• Statewide contracts administered by a state procurement office.
• National cooperatives that run solicitations on behalf of member agencies.
• Regional or county contracts with language allowing other agencies to use them.

Requirements

The agency's own purchasing policy must allow cooperative purchasing, and the original contract must have been competitively awarded with terms that permit use by other entities. Many agencies require documentation of the original competition and governing body approval above certain amounts.

Advantages

Speed, reduced administrative cost, and access to pricing negotiated at larger volumes.

What to check

Scope. The original scope must match what is being bought. Using a hardware contract for custom software development invites audit findings.

Terms. The other entity's terms may not fit local needs; insurance, data, and security requirements may need to be added.

Pricing. Cooperative pricing is a ceiling, not necessarily the best price; ask for a quote.

Grant rules. Federally funded purchases must also satisfy federal procurement standards, which may impose additional requirements on cooperative use.

When to run your own solicitation instead

When the requirement is complex or unique, when the agency wants to compare approaches, or when the available cooperative contracts do not fit the scope well.

A note on services

Cooperative contracts work best for products and standardized services. Custom technology work is often better served by a targeted solicitation with the agency's own requirements.