Expert: Cooperative agreements can be a good vehicle to make technology purchases for local governments

Research shows cooperative purchasing is becoming more popular among cities and counties, says Paul Irby, principal research analyst on the state, local and education (SLED) market analysis team at GovWin from Deltek. In its new SLED Cooperative Purchasing Market Landscape report, GovWin reported that total sales from the 13 leading national co-ops grew from $29.3 billion in 2015 to $59.7 billion for 2023. “Sales through the national co-ops are expected to keep growing to $64.7 billion by 2025,” Irby explains.

Cities and counties are big participants in national co-ops. “Out of the sample of 15,000 representative co-op purchases in the GovWin database in recent years, 20.4 percent were made by cities and 6.6 percent were made by counties,” Irby says.

Technology is a big co-op buying category for local governments. “When you filter the city co-op purchases, 13.9 percent were related to technology or telecom compared to a normal IT share of 4.2 percent among all traditional bid requests or RFPs. Similarly, when you turn to the counties, 17.1 percent of the co-op purchases were IT-related, compared with a typical bid/RFP share of 5.9 percent. This suggests a very strong preference among cities and counties for using a co-op to make a technology purchase,” Irby tells Co-op Solutions.

Yes, there are reasons why cities and counties may be moving from traditional procurement vehicles to cooperative purchasing. According to the GovWin market landscape report: “There are a variety of challenges that government procurement teams face through the normal RFP process.” These challenges, as noted in the report, may include:
• Staffing limitations and heavy workloads
• Demanding internal clients with tough-to-satisfy requirements
• Occasional emergency purchases that can’t wait for a traditional bidding process
• Budget shortfalls
• Inflation and volatile commodity prices
• Burdensome processes, rules and regulations
• Difficulty at times getting enough quality responses from bidders
• Taking on the risks of failure to properly scope out and understand the purchase
• The time-consuming pre-RFP research and development needed each time

The above challenges cover conventional purchases of technology as well as acquisitions of other products and services.

According to the GovWin analysis, cooperative contracts “can help to relieve or avoid some of the above challenges by outsourcing the solicitation process to save time, money and potentially reduce risk.” Cooperative agreements may be time-saving procurement vehicles, according to the GovWin market landscape report: “Rather than taking months to conduct a solicitation process from beginning to the end, cooperative procurement provides a streamlined alternative. Procurement teams can conduct their due diligence of an already awarded contract, make the determination to use, and then take delivery of many purchases within a few days or weeks.”

One task a jurisdiction will complete as part of its due-diligence efforts according to the GovWin publication is making sure the cooperative organization meets the entity’s own procurement policies and regulations.

Yes, cooperative contracts can make technology buys more efficient, Irby believes. “If you can buy more standardized tech from the online catalogs of co-op organizations without having to go through a traditional process, you’ve gained a little ground in the long-term battle for incremental improvement in efficient purchasing.”

He notes several reasons why local governments rely on cooperative contracts, including:
• Cooperative contracts can potentially save considerable internal staff time.
• They may enable taking delivery sooner for fill-in buying at the end of a quarter or fiscal year when there is extra budget left, and for proven/trusted solution.
• Cooperative agreements enable buyers to conveniently select proven, already researched and competitively sourced solutions.

Irby says cities and counties are looking at other tools that boost efficiencies beyond cooperative agreements, including: statewide contracts that local entities can use, flexible indefinite delivery/indefinite quantity (IDIQ) contracts, longer-term supply contracts that replace multiple annual ones, and greater use of e-Procurement systems for smoother and more coordinated purchasing.

“Buyers generally consider co-ops to be an important component of their overall purchasing strategy that allows them to conveniently select proven, already researched and competitively sourced solutions,” he says.

Local governments can find success in technology purchases when they consult in advance with the vendor community, Irby says. These entities sometimes develop strategic partnership-type relationships with industry. He elaborates: “The best governments will place a priority on seeking input from the technology vendor/supplier community before coming up with detailed specifications or goals for a given technology RFP and contract. Developing consultative relationships with industry can provide incredibly valuable ideas and feedback, helping sharpen concepts and challenge assumptions.”

He adds that these public-private sector collaborations are also helpful for the vendor community. “They educate potential bidders on the true essence of what their government clients are looking for. This clarity can in turn help encourage higher quality submissions from vendors and lead to projects that are better aligned with actual needs, goals, and vendor capabilities.”

It’s Irby’s belief that through partnerships with vendors and the private sector, “Local governments stay ahead of the curve, reduce risk, and ensure they aren’t left behind.”

As they plan to acquire new technology for their agencies, city officials should take a couple of steps, Irby says. “Local government procurement staffers need to stay educated on the latest technology trends and the vendor/supplier landscape of how these tools and solutions can be provided and leveraged. The goal is to know enough to help internal stakeholders and end users navigate their buying needs and help local government gain the extra efficiency they seek so they can better serve their citizens and businesses.”

Irby says procurement teams should also investigate how emerging trends like generative-AI (artificial intelligence) can help them gain efficiency in their job, such as with the time-consuming pre-bid research and specification-setting process. “It can help the procurement crew get up to speed faster on these technologies and solutions—at least to bring them to the point of being able to know how much they ‘don’t know’ and have better conversations with experts or industry insiders on the details and finer points.”

OMNIA Partners offers a robust portfolio of cooperative contracts in the public procurement space. The firm lists numerous cooperative contracts under the keyword “Technology.”

Michael Keating is senior editor for American City & County. Contact him at [email protected].