Enter the Competitive Bid Contract
he times they are a-changin'– six words from a Bob Dylan song seem to wrap up the past decade of procurement. In the beginning, an IFB (invitation for bid) or RFP (request for proposal) was created for everything that our schools needed. We toiled over the details, hoping that we specified the project in a way that would lead to the solution our organization really needed… and to the vendor who had the product we actually preferred… and that the supplier would provide the support and service necessary after the sale to make it a comprehensive and valuable solution. And that was good enough. It had to be; we had no other options.
With changing economic pressures, good enough is not good enough anymore. With declining budgets, staff reductions and increasing workloads, good enough is not the innovative approach needed by most school districts in their daily challenge to do more with less.
Enter the competitively bid contract, or cooperative agreement. Competitively bid contracts put choice in your tool belt, when your circumstances — staffing, budget, time and the like — make the formal bid process feel more like an obstacle. Choice allows you to pick a product, local dealer or brand. Choice lets you prioritize life-cycle costing over low bid. Choice can allow you to respond to “I need it now.”
The concept of sharing procurement resources cooperatively started years ago with only a few solutions. Today, cooperative efforts have expanded the breadth and diversity of the products and services offered, and they continue to grow in acceptance as the need for efficient, cost-effective solutions increases. The daily inquiry I get is a direct reflection of modern economic circumstances, the need for institutions to do more with less and the pursuit of an innovative solution. That might mean the concept of cooperative purchasing and its many benefits is new to you… and perhaps just what your school district needs, right now. The cost to explore existing solutions is much less than the RFP process, and the rewards possibly even greater still.
Cooperative agreements are contracts that have been awarded with the expressed intent and plan to allow other entities to utilize them — sometimes known as “piggy-backing.” The agreement(s) can be local, regional or of a national origin, and they contain specific language in the contract that allow your school to participate. While each agreement varies, they all offer the key benefit of choice.
Every school is different and has many unique needs. Yet the vast majority of purchases one school makes are the same as those purchased by every other school. For example, we all need flooring, furniture, office supplies and copiers. Cooperative agreements recognize these shared needs and leverage the volume of a total membership to create solutions that drive value and meet bid requirements.
With staff reductions and limited budgets, professional development for staff in many schools has been diminished and even eliminated. What’s being taught at these seminars? The value of cooperative agreements and their ability to capture a dwindling resource: time.
And it’s not just a trick or a trend. Consider these familiar scenarios.
“We need it now!” No time to complete the formal bid process.
“Use it or lose it!” Time constraints on when you can use your budget.
How about the time your staff and department have to procure all the commodities needed within your district?
Imagine instead dedicating your staff and resources to high priority projects and procurements — those that make you unique or that clearly offer a greater ROI through a formal bidding process. More time could allow you to repurpose your staff to take on greater challenges like green initiatives, life-cycle costing, e-procurement or even expand your role and proactively develop streamlined procurement strategies throughout the entire district.
Cooperative agreements can enable you take a proactive role in preparing solutions for the needs of departments throughout your district. Each department has a vendor community with which it interacts. Utilize their connections to find cooperative agreements for the products and services they desire. This approach will lead to a greater chance of getting exactly what they want and need. Compare the pricing you have historically paid for a product to the price offered through the cooperative agreement. Don’t forget to factor in the soft cost of doing the procurement and weigh the fact that you are getting exactly what your department needs.
Another benefit of cooperative agreements I often share is access to expertise. You may not be an expert in phone systems, technology solutions or complex equipment. Even if you are able to draft the RFP, do you have the knowledge to confidently evaluate the responses? Cooperative agreements have undergone strict review and have been selected based on their merits to meet industry needs. Your ability to utilize solutions often comes down to trust and the willingness to allow a contracting agency to scrutinize the necessary specifications for you.
An additional benefit of cooperative agreements is brand preference. Whether you have a warehouse full of replacement parts that only work with brand “x,” or technicians trained to only service brand “x” (and brand “x” only!) or you believe all copiers will break, but brand “y” has a local dealer with a history of providing outstanding service after the sale. It doesn’t do any good to save a penny a copy if the copier never works. They are all legitimate reasons to demand a particular brand. If you’ve ever been burned by low bid, or appreciate the concept of life-cycling costing, cooperative agreements can offer solutions from sustainable, world-class vendors who intend to service your school, not just buy your business.
Whether your district does it all — “we don’t bid anything, we only shop cooperative contracts,” or merely fills a gap with an occasional solution better served through a cooperative agreement, the ability to choose is what matters. “To bid, or not to bid,” that is not the question. The real question is when to bid and when to look at cooperative agreements. The choice will still always be yours.
I happen to think the time is right… now.
Duff Erholtz is the manager of Membership Services for The National Joint Powers Alliance (NJPA) and can be reached at duff.erholtz@NJPACOOP.org.
Source: SP&M, September 2012
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