Highlights: Everyone knows the advantages of buying in bulk. The more widgets you buy, the lower the price-per-widget. Consumers band together in shoppers’ clubs to apply that principle and save dollars. Why can’t government buyers do the same? The answer is, they can, and they do. In fact, government buyers in Ohio have been doing just that for more than 20 years. Whether you are a public entity hoping to buy for less or a seller wanting to tap in to a very large market, you can’t afford to miss the details of Ohio’s Cooperative Purchasing Program
The Birth of Cooperative Purchasing
Buy a membership card and save money on all your shopping needs! The idea caught on in the mid ‘80s, an era of low-cost shopping not only for consumers across the United States, but also for State agencies, counties, municipalities, school districts and other political subdivisions in Ohio. In 1983, consumer retail giants Costco and Sam’s Club opened their doors for business. Just two years later, the State of Ohio rolled out its Cooperative Purchasing Program. The idea behind all three is the same: allow member customers to leverage collective buying power to purchase limited quantities at a greatly reduced bulk rate. Created as part of the Cooperative Purchasing Act of 1985, the Cooperative Purchasing Program is administered by the Department of Administrative Services’ Office of Procurement Services. Membership in the Program allows State governmental agencies and political subdivisions to purchase goods and services through state government contracts, often at a deeply discounted cost.
What can a member buy through the Program? Here are just a few examples:
- Computer Hardware & Software
- Construction Equipment
- IT Consulting Services
- Janitorial Supplies
- Road Salt
- Sporting Goods
- And the list goes on . . . .
Members can even utilize the Cooperative Purchasing Program for construction projects. When the Wayne County Public Library needed a new roof for the Main Branch in Wooster, it turned to the Cooperative Purchasing Program; the result was an estimated savings of $50,000.00 in construction costs and other related expenses. Says Library Director Greg Lubelski, “The program is a great money saver . . . not enough libraries know about the program.”
Many school districts procure technology equipment and furnishings through the Program.
Joining the Club
The Program is gaining popularity around the State as membership has increased rapidly from an estimated 515 members in 1991 to just under 1,800 members in 2007.
So who can participate in the Cooperative Purchasing Program? Membership is open to counties, municipalities, townships, school districts, public libraries, park districts and other political subdivisions. It is a little known fact, but public hospitals are also eligible to participate in the Program.
It is probably easier to describe who cannot utilize the Program. This list is narrow and includes only members of the legislative and judicial branches of the State government, boards of elections, the capitol square review and advisory board, and the adjutant general.
How can you sign up for the Program? Membership is almost as simple as joining any neighborhood Sam’s Club or Costco. The three-step process requires (1) passage of an ordinance or resolution by the governing body of the political subdivision authorizing participation in the Program and stating that the political subdivision will comply with the terms of the State contracts, (2) payment of a nominal annual fee, and (3) completion of an annual report.
The Department of Administrative Services has taken advantage of the Internet to make much of this process very simple. A sample resolution is available on the DAS website at www.das.ohio.gov/gsd/proc.htm. Be sure to tailor it to your type of political subdivision. The DAS website also allows members to complete their annual reports on-line. The annual membership fee ranges from $100 up to a maximum of $525, depending on the type and size of the political subdivision.
Membership in the Program runs for a 12-month period of your choosing. For example, if a governmental agency joins in June 2007, its membership will not expire until June 2008. When you join, DAS will send you a list of available contract items and the vendor(s) who offer each item. DAS also works with member agencies to train them on how to use the Cooperative Purchasing Program website. Through the website, member agencies can access vendor lists and, in some cases, actually purchase the goods / services on-line.
Effect on Competitive Bidding
What about competitive bidding? Doesn’t a political subdivision still have to follow those statutes, no matter what? The short answer is no. Because the vendors of goods and services have already gone through a competitive bidding process to get onto the State’s list of vendors, buying from that list satisfies the bidding requirement.
The only exception is that goods cannot be purchased from the State’s list after bids have been taken on a specific item. For example, if you bid out a re-roofing project for your library, you cannot then use the Program to find a lower-cost roofing contractor. As with most things in government, there is an exception to the exception that allows you to purchase goods and services off the State’s list following bidding, but only when those goods and services are for the same terms, conditions and specifications that were included in the bid. (You can find this exception-to-the-exception in Ohio Revised Code § 125.04(B)(3).)
All of this said, the Cooperative Purchasing Program serves as a major exception to the public bidding requirements and allows political subdivisions to save on costs and fees, as well as time, inherent in the bidding process. It also can allow the choice of a specific item, something not always achieved through the bidding process.
Limitations of the Program
Are there any restrictions to using the Cooperative Purchasing Program? There are not many. You will recall that the enabling resolution or ordinance necessary for membership in the Program must say that the agency or political subdivision will comply with the terms of the State contracts. What this means is that the member can only purchase what is listed on the State contract and nothing else (if it wants to take advantage of the State’s special pricing).
For example, if a County wanted to purchase a Ford Taurus but the State contract only listed a Chevrolet Corsica, the County would be restricted to purchasing the Corsica and not the Taurus. In this example, the County could certainly opt not to utilize the Program and go ahead and purchase the Taurus. But the County would be subject to public bidding laws and all other applicable purchasing statutes.
Otherwise, there are no strings attached, and discretion is left to the agency or political subdivision regarding how much or how little it wishes to use the program. Also note that the State has no hand in the actual commercial transaction, and it is the individual governmental agency’s or political subdivision’s responsibility to order and pay for the good or service.
Advice for Vendors
Suppose you are a vendor who would like to have your company placed on the State’s list. How can you get your name added? Begin by contacting the DAS, State Purchasing Bid Desk, at (614) 466-4635. Ask to be put in contact with the State Buyer who is handling your particular good or service. Contracts for goods and services are bid on a periodic basis, and contracts can be awarded for terms up to 60 months in length.
To be eligible for placement on the State’s list, a vendor must certify that it is in compliance with Ohio ethics and election laws—including the laws limiting political contributions—and will remain in compliance as long as its contract lasts.
The State initially used to award contracts to just one vendor for a particular good or service. In the mid 1990’s, things changed. The State began to award multiple contracts for certain goods and services. For example, instead of there being only one contract for one specific brand of carpet, just about every carpet manufacturer is now listed on the State’s list. Government shoppers now have more options and flexibility in the types of goods and services they may purchase.