Cooperative Contracting: Asking the Right Questions
This post is first in a two-part series on cooperative contracting. A version of this post originally appeared in Government Procurement.]
Once upon a time, source selection typically meant determining a supplier using the appropriate solicitation method, such as Invitation for Bid (IFB) or Request for Proposal (RFP). Occasionally, and if we were fortunate, the purchasing agent would discover a cooperative contract to utilize, thus saving money, valuable time and resources.
Today, there is a significant trend in public procurement: an increase in both the availability and the utilization of cooperative contracts. From time to time, I am asked, “Are there too many cooperative contracts?” That is really the wrong question. What we should be asking is, “With all the cooperative contracts available, what criteria should I use to successfully determine which contracts provide the best value for my particular organization’s requirements?”
The objective in determining which cooperative contracts to use is fundamentally the same as when a public sector organization conducts its own solicitations; that is, determining which contract provides the best value. As public procurement officials, we are aware there are many factors to consider in selecting a supplier, including but not limited to price, quality, supplier capabilities and service. There are also factors to consider in utilizing a cooperative contract awarded by another organization.
These factors include the existence of maximized competition; transparency of the solicitation process; the quality and value of the resulting contract; and the performance of the awarded supplier. During my 35+ years in public procurement, I have utilized a checklist of four standards to consider (in addition to the basic procurement criteria of price, quality, supplier, etc.) when determining which cooperative contract to use.
When you decide to utilize a cooperative contract, you are essentially substituting the soliciting/awarding agency’s procurement process, their decision-making abilities and their reputation for yours. Therefore, it is paramount that the soliciting/awarding agency has a professional and respected procurement department. This “host” agency or contract holder should be active in public procurement associations and its senior management should take a leadership position in the profession. The agency’s management and staff should hold professional certification. The agency should have earned the Achievement of Excellence in Procurement award recognizing organizational excellence.
Standard: Utilize those cooperative contracts that have been competitively solicited, evaluated, awarded and administered by a public agency recognized for procurement excellence.
A primary objective for us as public procurement professionals is to guarantee and maximize fair and open competition. When excessive multiple awards are made, such as GSA supply schedule contracts, the benefits of competition are minimized and in some instances negated as there is no real incentive for the supplier(s) to provide the best value proposal. The use of multiple awards should be limited to the fewest possible number of suppliers to satisfy the needs of the agency.
An additional factor to consider for the competitiveness of a particular solicitation is the number of responses that were received and whether those responses were from industry-leading suppliers. Multiple responses to a solicitation will increase the competition for the award. With more supplier responses to a solicitation, the awarding agency is better able to ensure that the resulting contract(s) provide the best value.
Standard: To encourage maximum competition, utilize those cooperative contracts that (a) have limited multiple awards and (b) have resulted from a solicitation that received more than one responding proposal.
In the next instalment of this series, I’ll talk about two additional standards to help you make this very important decision.