Cooperative purchasing contracts, explained

A cooperative purchasing contract is a contract one public body competes so that many others can buy from it. Instead of every city running its own bid for the same trucks, laptops or software, one agency or cooperative runs a single competitive solicitation sized for all of them, and each eligible agency buys from the result.

For a buyer, it saves months. For a vendor, one award can open sales to thousands of agencies that never have to run their own bid. That's why co-op contracts come up so often in public-sector sales.

How they work

The cooperative or lead agency writes a solicitation for a category, advertises it publicly, evaluates the responses and awards one or more contracts. Eligible agencies then buy from the awarded vendors at the contract's terms, usually by placing an order that references the contract number.

The agency buying still has to be allowed to use the contract. That depends on its state's law and its own procurement rules. Most states allow it in some form, but the details differ, so buyers check with their own purchasing office.

The main types

National cooperatives. Sourcewell, a public agency in Minnesota, runs national solicitations and awards contracts that eligible government and education agencies across North America can use. It describes itself as serving more than 50,000 agencies. Its contracts usually run four years with a possible one-year extension (Sourcewell). Several other national cooperatives work in a similar way.

State-led cooperatives. NASPO ValuePoint is run by the national association of state procurement officials. One lead state runs the solicitation under its own laws and signs a master agreement with each awarded vendor. Other states then opt in by signing a participating addendum with the vendor, which adds their own terms (NASPO ValuePoint). Cities and counties in a participating state can usually buy too, unless the state's addendum excludes them.

State contracts. Most states award statewide contracts for their own agencies, and many let cities, counties and school districts buy from them.

Federal schedules. Through GSA's Cooperative Purchasing program, state and local governments can buy IT, security and law enforcement products and services from certain GSA Multiple Award Schedule contracts (GSA).

Regional cooperatives. Councils of governments, school purchasing cooperatives and groups of nearby cities often bid together for common items.

Piggybacking

Piggybacking means one agency buying from a contract another agency competed, even if the original contract wasn't set up as a cooperative. Whether it's allowed depends on the buying agency's state law, and on whether the original solicitation said other agencies could use it. If you're bidding on a contract and want other agencies to be able to piggyback on it, check whether the solicitation includes that language.

When to go after one

Most startups shouldn't start with a cooperative contract. The responses are long, the evaluation is competitive, and the award itself doesn't sell anything. Agencies still have to find you and choose you.

It starts to make sense when:

• You have a few public customers and references
• Buyers tell you the RFP process is what's slowing them down
• You sell something many agencies buy in the same form, like hardware, a software subscription or a standard service
• You have someone to sell the contract once it's awarded

Until then, many vendors sell through a reseller or partner who already holds a cooperative contract. Ask your best prospects which contracts they buy from most often.

Watch for the solicitations

Cooperatives post their solicitations publicly, like any other bid, and many publish a calendar of upcoming categories. Missing one can mean waiting years for the next round in your category.

Capveon checks federal, state and local agencies across the US and Canada each day and shows you which agencies are planning to buy what you sell. Enter your website to see the agencies planning to buy what you sell, with the meeting, plan or budget behind each one.