The Southeast Florida Governmental Purchasing Cooperative
A Regional Cooperative Purchasing Case Study
Local governments are collaborating on procurement to save public staff time and taxpayer dollars. Efforts like the NIGP Columbia Chapter’s ICP group in the Portland, OR metro; the Kansas City Regional Purchasing Cooperative in the Kansas City metro; and the Strategic Alliance for Volume Expenditures (S.A.V.E.) in Arizona help local agencies within a region share the administrative costs of purchasing and aggregate their buying power to achieve cost savings. Here, we highlight the work of the Southeast Florida Governmental Purchasing Cooperative and share lessons for strengthening regional purchasing collaboration that other agencies can learn from this successful initiative.
What is the Southeast Florida Governmental Purchasing Cooperative?
The Southeast Florida Chapter of NIGP created the Southeast Florida Governmental Purchasing Cooperative to foster collaboration and information-sharing across public agencies in the Miami-Dade, Broward, and Palm Beach counties. Today, there are more than 50 members, including city governments, public utilities, law enforcement agencies, and other types of public agencies.
The cooperative has a special model: it divides up purchases for several shared needs across its members. Instead of having each member run its own individual solicitations, one member agency runs a bid on behalf of the whole group. A “Corresponding Secretary” manages communication between members, sharing information to help the bidding agency members collect quantities and specifications from other member participants. In this way, member agencies can buy off the contracts created by other members agencies in the group, knowing that the original solicitation satisfied their local requirements. The cooperative helps members achieve cost savings, since suppliers offer lower unit prices for higher volume purchases, and reduces the administrative burden for members of running similar solicitations.
The time-saving benefits of the cooperative are especially valuable for members. According to Keith Glatz, the Purchasing and Contracts Manager for the City of Tamarac and a member of the cooperative, “If I had to purchase on my own everything that the cooperative now handles, I would need at least two additional staff.”
What innovations make the cooperative successful?
Division of labor
Only agencies in Broward, Miami-Dade, and Palm Beach Counties are eligible to participate in the cooperative, and if a government wishes to use one of the cooperative’s contracts to make a purchase, that agency must also be willing to run at least one solicitation or perform some other service on behalf of the group. In part, according to Glatz, this helps eliminate the free-rider problem and ensures that all agencies are contributing something back to the larger group.
This approach is unusual. While the cooperative certainly assists agencies in aggregating demand across members, its most useful function is in dividing up labor across multiple member agencies and avoiding redundant solicitations. Every member has a role, and rather than seeking out a potential cooperative solution each time a new purchase needs to be made, members know exactly who to contact and can move directly to buying off a contract their neighbor negotiated. In many ways, the cooperative functions like a single purchasing office that handles the administration of specific procurements on behalf of all of its members.
Organized, facilitated, and frequent communication between purchasing officers
In any collaborative environment, it’s important to ensure there are clear points of contact or staff who feel ownership over the process and can drive the collaboration forward. This is particularly true in procurement, where many purchasers have expressed that unclear roles and responsibilities can often scuttle a joint purchase. To avoid any possible confusion, the Southeast Florida Governmental Purchasing Cooperative establishes clear lines of communication between members through the group’s elected Corresponding Secretary.
The Corresponding Secretary serves as a single point of contact for distributing surveys and inquiries to the group. For example, Glatz says, “when an agency is planning to increase quantities on a contract to make it more sellable to the supplier community, they would ask others in the group if they are interested in cooperating.” In order to determine the amount of demand among members, the Corresponding Secretary will send a survey to members. Having a single person designated to lead communications keeps correspondences organized and eliminates uncertainty for government agencies when it comes to identifying the right point of contact. According to Glatz, “when you see the Corresponding Secretary’s name on the email, it lends credibility to the message.”
In addition, the cooperative holds monthly meetings that allow purchasers to discuss contracts and upcoming procurement opportunities, as well as share best practices and challenges with one another. “What we’ve found out is just the mere opportunity for purchasing managers to have face-to-face meetings with other purchasing managers is extremely important,” says Glatz. While some members might have opportunities to connect with other purchasers at quarterly NIGP meetings, the monthly meetings of the cooperative increase the frequency and depth of those conversations.