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Shareable contracts (also known in the industry as cooperative contracts or piggyback contracts) help public entities shorten purchasing timelines and achieve cost savings. Already, about 20% of local government purchasing spend flows through shareable contracts.
While national purchasing cooperatives have become almost synonymous with “cooperative contracts,” shareable contracts actually include contracts from local public entities, states, regional purchasing cooperatives, national purchasing cooperatives, and even the federal government. Pavilion helps you find and use the best contract for your needs from across the largest collection of shareable contracts from cooperative and public entity sources, all in one place.
Here, we cover the different types of public entities and organizations that create shareable contracts:
Local public entities
Any local public entity can create a shareable contract. Typically, entities create shareable contracts simply by creating contracts that meet their own needs through competition. Since contracts are created to meet local needs, many local entities find that contracts from local entities are more likely to cover certain categories, especially services, and enable work with local and diverse suppliers.
Some public entities have very flexible regulations, which allow them to leverage any contract created by another entity as long as the supplier agrees. Other entities have more strict requirements around using shareable contracts, such as requiring proof of advertisement to suppliers in their state.
In most cases, entities must follow a due diligence checklist to use a shareable contract and will check to confirm that a contract was created through a formal competitive process, is active, and includes shareable language.
Previously, discovering contracts from local entities required visiting each government’s website or reaching out to your network. Now, finding these contracts is easy with Pavilion. Pavilion is adding more local entity data each week. Consider joining City of Mesa, AZ; Orange County, CA; County of Rockland, NY; and many other entities in publishing your contracts to Pavilion so peer public entities can benefit from the work you’ve done, too.
States
States frequently create contracts that cities, counties, and special districts in that state (and beyond) may use. For example, the Texas Department of Information Resources (DIR) originates a number of different contracts that public entities in Texas and other states can use to make IT-related purchases. In FY18 alone, the DIR contracts saved local Texas entities more than $50 million due to the volume discounts achieved by the State of Texas. Others, like Utah, Kansas, and Missouri make contracts covering a range of goods and services available to public entities.
Pavilion has the country’s largest collection of State entity contracts, so you can search for shareable contracts from your State when you run a shareable contract search on Pavilion.
Regional organizations
Sometimes, multiple local public entities will come together to form regional purchasing groups or cooperatives. These can take on a number of different forms, but the main goals are to aggregate the collective purchasing demand of members and share the administrative burden of buying shared needs. In the Kansas City Metro Area, the Kansas City Regional Purchasing Cooperative creates regional cooperative contracts on behalf of members and publishes these contracts with Pavilion, so its members can easily find and use these contracts. Similarly, Region ESC 18 in Texas creates contracts that support and serve school districts in its region and beyond, and uses Pavilion to share these contracts with its members. In Arizona, the Strategic Alliance for Volume Expenditures (SAVE) connects more than 300 public entities to shareable contracts. SAVE members now also publish their contracts and documents to Pavilion, too.
National purchasing cooperatives
National purchasing cooperatives are organizations that help create and distribute shareable contracts for use by local and sometimes state entities across the country. These organizations can be governmental organizations, nonprofits, and for-profit organizations.
- Governmental: Some national cooperatives, like Sourcewell in Minnesota and HGACBuy in Texas are public entities and therefore have the authority to create their own contracts. These entities typically create their own contracts as a lead entity and also manage and run the distribution of those contracts as a cooperative organization.
- Nonprofit or for-profit: These organizations, including NASPO Value Point and OMNIA Partners, partner with public entities as lead public agencies to create shareable contracts. In these cases, the national cooperative works with a specific “lead agency” to generate a contract, then markets this contract to thousands of public agencies across the country. For NASPO ValuePoint, the lead agency is always another state agency. To utilize a NASPO ValuePoint contract as a local entity, your state must generally have signed a Participating Addendum.
Typically, national cooperatives operate by charging an administrative fee on all transactions made on their contracts. This fee can range from 0.25% up to 4% and is generally paid by suppliers each time the supplier generates a new sale on a contract. If the national cooperative worked with a lead agency to create the contract, they’ll typically also share part of this fee back with the public agency that served as the lead public agency on the contract.
As cooperative purchasing has become more popular, national cooperatives have achieved remarkable size and scale. For example, U.S. Communities, now part of OMNIA Partners, connected members to more than $2.7 billion in goods and services in 2018. In some cases, local public entities have been able generate hundreds of thousands or even millions of dollars each year in revenue share from administrative fees on contracts that are well-marketed across the country.
In recent years, as cooperative purchasing has become a more popular procurement method for local public entities, the number of available national purchasing cooperatives has also increased. Pavilion makes it easy to search across many of these national purchasing cooperatives, all in one place, including: 1GPA, Allied States Cooperative, BuyBoard, Choice Partners, Equalis Group, HGACBuy, NASPO ValuePoint, NCPA, Savvik Buying Group, Sourcewell, and more.
The federal General Services Administration (GSA)
The General Services Administration (GSA) manages the GSA Schedule Program. The GSA Schedule is also known as the Federal Supply Schedule and Multiple Award Schedule (MAS). Schedule contracts are long-term, governmentwide contracts with companies intended to make buying easy and efficient. Contracts are competitively negotiated.
Many contracts are available for state and local agency use through the GSA's Cooperative Purchasing Program. Previously, contracts open to local agencies were organized by Schedule; local public entities knew they could purchase IT, security, and law enforcement products and services through the Information Technology (IT) Schedule 70 and Total Security Solutions Schedule 84. More recently, GSA has been modernizing federal acquisition by consolidating its 24 Schedules into one single Schedule for products, services, and other solutions. The goal of consolidation is to provide increased consistency in the program, including simplifying terms and conditions and eliminating duplicate contracts.
Still, the consolidation has introduced some confusion for state and local agencies about which contracts they may utilize now that cooperative purchasing is no longer organized strictly under Schedules 70 and 84. Now, the single consolidated Schedule is organized into Large Categories, Subcategories, and Special Item Numbers (SINs). In general, the range of products and services available for cooperative purchasing by local agencies remains the same. You can review the full list of cooperative purchasing eligible special item numbers (SINs) on the GSA's Available Offerings page by clicking on the latest "Available Offerings Attachment [XLSX - 250 KB].” Cooperative Purchasing Eligibility is noted Yes or No (Y/N) by SIN in column N on the “NEW Consolidated Available Offer” tab. You can also search for GSA contracts that are open to cooperative purchasing on Pavilion, since we've already done the work for you!
A final note about GSA contracts: Schedule contracts comply with the Federal Acquisition Regulation (FAR) and the Competition in Contracting Act (CICA). However, since local public entities may have special requirements around competition in contracting, you will want to confirm that your agency can utilize GSA Schedule contracts before purchasing from a Schedule contract.
With Pavilion, you can find and use contracts from all these sources – local entities, states, regional organizations, national purchasing cooperatives, and the GSA – all in one place. Get started or schedule a walkthrough to learn more.
