What is a cooperative contract?
A cooperative contract is very similar to a normal government contract, except the contract is created with the expectation that it may be used in the future by other public entities. As a supplier, you should be aware of the following components of a cooperative contract:
- Cooperative language: In order for a contract to be used by other governments (known as “piggybacking”), the contract typically must contain cooperative language that permits other public entities to use it under the same, or similar, negotiated terms. Cooperative language comes in many different forms, and may be found in the official contract, original solicitation, or (preferably) both.
- Participating agencies: It’s also typically made clear which public entities are allowed to utilize the contract. In some cases, any public entity is allowed to participate, leaving it up to the supplier to accept or decline future business depending on geographical limitations or order sizes. In other cases, the contract may outline specific geographic restrictions (i.e. “Agencies within the State of Kansas”) or even list specific intended entities.
- Pricing structure: Pricing on cooperative contracts is generally a ceiling price; depending on the terms and conditions of the contract, purchasing entities may expect to be able to negotiate additional discounts. Do not commit to pricing in a contract that is so low that you would not be able to offer that pricing to a range of public entities. Many suppliers structure pricing as a discount off of a list or offer aggregated discounts based on volume. Remember, if the contract includes cooperative language, you’ll want to be able to offer the price listed or even a slightly better price (according to deal size and other factors that impact margins) to future government customers buying off the contract.