Cooperative Purchasing Makes Sense – and Saves Cents

By: Cooperative Purchasing Newsletter

When calculating the Total Cost of Procurement (TCP), it is not enough to look at the price of the product or service alone. TCP is composed of the time, effort, and resources that go into the final delivery of an item, including:

  • Specification research
  • Vendor interviews
  • Creation of bid & RFP documents
  • Advertisement of procurements
  • Pre-bid conferences
  • Bid openings
  • Bid & RFP evaluations
  • Coordination of evaluation committees
  • Creation of award recommendations
  • Action taken by governing body
  • Protection against legal challenges
  • Establishment of contract documents
  • Issuance and/or negotiation of contracts
  • Administration of contracts

Consider the hard dollar costs of such activities as advertising as well as the soft dollar costs associated with time spent by purchasing and legal staff in the procurement process. Once all these factors are added, the TCP can range from under $1,000 for a simple commodity purchase to many thousands of dollars for more complex RFPs. The time involved in making an award fora more complicated procurement can easily exceed 12 months.

Cooperative purchasing makes this process much more efficient by relying on the procurement steps that HGACBuy has already completed. In most cases, purchasing through HGACBuy involves working directly with a contractor, receiving a quote, and issuing a purchase order. By using HGACBuy, you are working directly with another unit of local government since HGACBuy isa political subdivision. By leveraging thousands of local governments nationwide, the savings on the product or service adds up as well. So to meet the procurement needs of your jurisdiction,cooperative purchasing through HGACBuy not only makes sense; it saves cents, too!