Cooperative Purchasing
Cooperative purchasing allows government agencies to buy goods and services using contracts competitively solicited and awarded by another public entity, saving time and leveraging group buying power.
What Is Cooperative Purchasing?
Cooperative purchasing is a procurement method that lets government agencies buy goods and services through contracts that were already competitively bid and awarded by another public entity. Instead of running their own RFP, an agency can use a contract that a cooperative purchasing organization or lead agency has already competed on behalf of thousands of members.
Think of it as group buying for government. A cooperative purchasing organization like Sourcewell runs a competitive solicitation, evaluates vendors, and awards contracts. Then any of its 50,000+ member agencies can purchase from those contracts without conducting their own procurement. The competition already happened at the cooperative level.
For SLED (state, local, and education) agencies, cooperative purchasing solves two problems: it saves procurement staff time and it leverages collective buying power to negotiate better pricing than a single agency could get on its own.
How Cooperative Purchasing Works
- A lead agency or co-op organization issues a competitive solicitation. The solicitation is typically broader than a single-agency RFP, covering product categories rather than specific one-time needs.
- Vendors compete and win contracts. Multiple vendors may be awarded contracts in the same category, giving member agencies choices.
- Member agencies access the contracts. Any public entity that is a member of the cooperative (membership is usually free) can purchase from awarded vendors using the co-op contract as their contract vehicle.
- Individual agencies issue purchase orders. The agency places orders directly with the vendor, referencing the cooperative contract number.
Major Cooperative Purchasing Organizations
| Organization | Members | Focus | Coverage |
|---|---|---|---|
| Sourcewell | 50,000+ | Broad (technology, fleet, facilities, services) | All 50 states |
| OMNIA Partners | Largest U.S. co-op | Broad (public and private sector) | All 50 states |
| NASPO ValuePoint | State-led | State procurement focus | Participating states |
| E&I Cooperative Services | Higher education | Colleges and universities | National |
| TIPS/TAPS | Government and education | Texas-based, national reach | All 50 states |
Why Cooperative Purchasing Matters for Vendors
For vendors selling to SLED agencies, getting on a cooperative contract is one of the most powerful growth levers available:
Access to thousands of buyers through one competition
Winning a Sourcewell contract gives you access to over 50,000 member agencies. Instead of competing in thousands of individual RFPs, you compete once and sell to many.
Agencies prefer the path of least resistance
Many SLED procurement officers actively look for cooperative contracts before issuing their own solicitations. A co-op contract is pre-competed, legally defensible, and saves weeks of procurement process time. If you are on contract and your competitor is not, you have a structural advantage.
Some states require a contract vehicle
In certain states, agencies must purchase through an approved contract vehicle. Cooperative contracts qualify. If your product is not available through a co-op or state contract, those agencies literally cannot buy from you.
Easier budget justification
Procurement officers can point to the cooperative's competitive process to justify the purchase. This is especially important for large purchases that require board or council approval.
How to Get on a Cooperative Contract
- Identify which co-ops your target agencies use. Ask your existing customers which cooperative contracts they purchase through. Check agency procurement policies for approved contract vehicles.
- Monitor co-op solicitation calendars. Organizations like Sourcewell and OMNIA Partners publish solicitation schedules. New contract categories open regularly.
- Respond to the competitive solicitation. The co-op will issue an RFP. Your proposal needs to address the co-op's evaluation criteria, which often emphasize national reach, pricing, and support capabilities.
- Win the award and activate. After winning, you need to actively market your co-op contract to member agencies. The co-op provides the vehicle, but you still need to drive demand.
Cooperative Purchasing vs. Piggyback Contracts
Piggyback contracts are a specific form of cooperative purchasing where one agency uses another agency's existing contract. The difference is that formal cooperative purchasing organizations run solicitations specifically designed for shared use, while piggybacking uses a contract that was originally competed for a single agency.
Both are legally valid in most jurisdictions. Cooperative contracts from major organizations tend to carry more weight because they were designed for multi-agency use from the start.
Frequently Asked Questions
What is cooperative purchasing in government?
Cooperative purchasing lets government agencies buy through contracts that were already competitively bid by another public entity or purchasing organization. It saves agencies time by eliminating the need to run their own solicitations while providing access to pre-negotiated pricing.
Is cooperative purchasing legal for state and local government?
Yes. Every state has laws authorizing cooperative purchasing. Most SLED agencies can use cooperative contracts as an approved procurement method. Some states require agencies to use an approved contract vehicle for purchases above certain thresholds.
How do vendors get on a cooperative purchasing contract?
Vendors respond to competitive solicitations issued by cooperative purchasing organizations like Sourcewell, OMNIA Partners, or NASPO ValuePoint. The co-op evaluates proposals and awards contracts. Once awarded, the vendor can sell to all member agencies through that contract.
What is the difference between cooperative purchasing and a GSA Schedule?
A GSA Schedule is a federal contract administered by the General Services Administration. Cooperative purchasing contracts are competed by organizations serving state, local, and education agencies. Some agencies can use either, but GSA Schedules are primarily designed for federal buyers.
Do agencies pay to use cooperative purchasing contracts?
No. Membership in cooperative purchasing organizations is typically free for public agencies. The co-op is funded through small administrative fees built into the contract pricing, paid by the vendor rather than the agency.