The Kansas City Regional Purchasing Cooperative (KCRPC)
A Regional Cooperative Purchasing Case Study
From school lunches to transportation software, water treatment chemicals to construction services, American local governments spend over $1.6T each year buying similar goods and services. Increasingly, governments are working together to share the administrative costs of purchasing and aggregate buying power to save taxpayer dollars across a region. These regional purchasing collaboration efforts offer lessons to public agencies wishing to save staff time and make best use of taxpayer dollars. Here, we highlight the work of one successful regional purchasing collaboration initiative, the Kansas City Regional Purchasing Cooperative (KCRPC).
What is the Kansas City Regional Purchasing Cooperative (KCRPC)?
KCRPC is a project of the Mid-America Regional Council (MARC), a nonprofit association of 119 cities and 9 counties in the Kansas City metro region, and the Mid-America Council of Public Procurement (MACPP), the local chapter of NIGP — The Institute for Public Procurement. MARC and MACPP established the KCRPC in 2002 with the goal of reducing the costs of procurement and formalizing procurement collaboration in the region. The initiative is supported by a Program Coordinator, Rita Parker, and an Advisory Committee made up of representatives of member governments. KCRPC also collects a small administrative fee, paid by suppliers to KCRPC, on purchases from contracts it creates.
So far, KCRPC has delivered almost $12 million in savings to governments in the Kansas City metro region. “We are saving members on their advertising costs, administrative time, and the actual costs of the good or service,” says Parker. “In addition, cooperative contracts increase the sharing of information for current market pricing and available suppliers.”
What innovations make KCRPC successful?
Joint solicitations on behalf of multiple entities
The KCRPC Program Coordinator works closely with the Advisory Committee and other MARC members to identify shared needs across member governments. Then, the Program Coordinator assembles a joint solicitation. Running a shared competitive bidding process means aggregating demand of participating governments as well as developing bid and contract documents that meet all the regulations and requirements of participating agencies. KCRPC has developed template bid solicitation and contract language that meets these needs. However, as Parker shares, “if a city has any additional requirements, we can merge those into our documentation to ensure all of their requirements are covered under our bid.” Running a joint competitive bidding process helps agencies in the region achieve lower prices and save the administrative costs of running their own solicitation processes. KCRPC then makes the contract and solicitation documents available on their website, powered by CoProcure, so regional agencies, often even those who did not participate in the original bidding process, can purchase using the contracts without running their own new solicitations.
Strategic partnerships with other cooperatives
KCRPC works with other purchasing cooperatives to serve its members, focus its new joint solicitation efforts on the gaps in the market, and generate additional revenue. The Houston-Galveston Area Council’s cooperative purchasing program, commonly known as HGACBuy, is known for creating national cooperative contracts for capital-intensive purchases, like heavy machinery, fire engines, and ambulances. KCRPC was the first agency to partner with HGACBuy. KCRPC markets HGACBuy contracts to its member governments and receives a portion of HGACBuy’s administrative fees on every purchase its members make. So far, MARC members have spent nearly $190 million on HGACBuy contracts since KCRPC was founded. In addition, working with HGACBuy allows KCRPC to focus its joint solicitation work on the needs of its members that are not met with existing cooperative contracts from national cooperatives.
Sharing contract data across the region through CoProcure
Beyond generating its own contracts and sharing contracts from HGACBuy, KCRPC makes cooperative contracts from its members in the region and from national cooperatives available to its members. It used to maintain its own database of these contracts on its website. Now, KCRPC has replaced its database with CoProcure to make even more contracts readily accessible to members. Using CoProcure has cut down on the time that KCRPC administrative staff has to spend on the administrative tasks around data collection and publication, while expanding the number of contract options that are readily available to KCRPC member agencies.