States and Localities Partner Up on Procurement (Industry Perspective)

The federal government has long struggled to consolidate its purchasing requirements, using complex mechanisms with limited success. Yet at the state procurement level, which in aggregate approaches federal scale, I’m seeing growth in purchasing cooperatives for everything from fire trucks to information technology.

Rather than each governmental entity endlessly repeating a time-consuming full-and-open competitive process for every buy, cooperatives conduct competitions for multiple award contracts, creating a contractual framework and facilitating faster, lower-cost competitions at the order level. In some cases, cooperatives also are able to aggregate requirements and pool money, lowering costs for both buyers and sellers.

Researchers at Onvia estimate that purchasing co-ops account for only about 2.2 percent of dollars spent at the state, local and educational level. But that is still a big number. Contracts available under the National Association of State Procurement Officers (NASPO) ValuePoint program, described below, drew more than $10 billion in 2014, growing 15 percent. Although counties and cities also participate in interstate purchasing co-ops, state governments tend to use them most.

There are three main purchasing co-ops operating nationally for U.S. nonfederal government and other nonprofit entities in addition to the federal cooperative purchasing program run by GSA. These purchasing co-ops allow for technology manufacturers, distributors, resellers and dealers to participate. And a glance at the products and services they offer shows they quickly adapt to changing IT market conditions by including cloud, cybersecurity and other software services.

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