Voice of Choice - Summer Edition
What do you look for as you analyze a specific cooperative purchasing contract?
Sourcewell’s aim is to best serve our membership.
It was brought to our attention that the procurement community desired a tool to address all things cooperative – specifically analyzing and addressing components as cooperative agreements are considered. The “Roadmap to a Cooperative Procurement Strategy” was born in a National Cooperative Procurement Partners committee meeting and publicly presented for the first time in November 2016 at the National Procurement Institute's annual conference.
To bring the roadmap to life, we invited Carrie Mathes (Woodel when this series started, but happily married with a new last name now), chief procurement official for the Orange County Board of County Commissioners in Florida, and Craig Rader, purchasing agent for Sacramento County in California, to contribute their experiences and practices regarding each 'landmark' along the cooperative purchasing map.
In our Voice of Choice Winter Edition, Carrie and Craig weighed in on what a public agency considers when analyzing and evaluating a cooperative purchasing agency; in this edition, they'll provide insight on how they analyze and evaluate a cooperative purchasing contract.
What do you consider when you analyze and evaluate a cooperative purchasing contract?
Carrie Mathes (formerly Carrie Woodell), MPA, CFCM, CPPO, C.P.M., CPPB, A.P.P.
Chief Procurement Official, Orange County (Fla.) Board of County Commissioners
“When considering utilizing an alternate contract source, we require a full understanding of what the contract language entails.
For instance, we carefully review the contract terms regarding indemnification, length of the contract, payment and delivery terms, insurance provisions, required licensure or bonding requirements, applicable warranties, and termination provisions.
We review the contract terms in their entirety to ensure it is not inclusive of any provisions that would be detrimental to the county when considering use of the alternate contract. We strive to receive a similar level of protection for the county that we would in our own contract documents."
Craig Rader, CPPO, CPPB
Purchasing Agent, Sacramento County
“When utilizing cooperative contracts, the county of Sacramento will review, in addition to pricing, the basic terms and condition of the contract, such as payment terms, FOB point, return policy, warranty, etc.
Depending on the commodity or service being performed, we will dive deeper for commodity- or service-specific requirements, such as certifications that may be required by the State of California. We also need to consider funding requirements. For example, if the purchase is federally funded, we will determine if the cooperative checked the federal debarment listing when the contract was established and renewed (if applicable). If not, we will need to perform this check.
If there are multiple cooperative agreements for the commodity or service, which is not uncommon, we will review the various contracts and perform a “bake-off” or side-by-side comparison. Our analysis includes pricing and various terms as mentioned above.
Do not underestimate the level of effort that may be required to perform your due diligence, as the process can take several months to obtain all the necessary information and perform your analysis.”
The Roadmap asks the following when performing an analysis of a cooperative purchasing contract:
- Does the awarded contract contain the specific solution you require?
- When was the contract awarded, and when does it expire?
- What are the qualifications, capabilities, and financial health of the awarded supplier?
- Does the vendor have the capacity to fulfill your agency’s needs?
- Can you obtain a copy of all applicable contract documents?
- How is pricing addressed? Is it actual, percentage discount from a list, or ceiling-based pricing?
- Can the terms and conditions of the contract be amended to meet the needs of your agency? Indemnity clause?
- How is contract use monitored? Are usage reports available?
- Is there a rebate on the contract? How is that paid? Can it be credited against the contract pricing?
- Does the cooperative have a process for vendor issues or disputes?
Sourcewell (formerly National Joint Powers Alliance) is a self-supporting government organization, partnering with education, government, and nonprofits to boost student and community success. Created in 1978 as one of Minnesota’s nine service cooperatives, we offer training and shared services to our central-Minnesota members. Throughout North America, we offer a cooperative purchasing program with over 200 awarded vendors on contract. Sourcewell is driven by service and the ability to strategically reinvest in member communities.