5 Cooperative Purchasing Pitfalls and How to Avoid Them
Cooperative purchasing has become a cornerstone of public procurement but the game is changing with technology. Here's how to adjust your strategy for the modern world.
Public procurement can get complicated. Procurement teams are tasked with finding contracts to secure goods and services, working within a budget, and remaining compliant with regulations. Cooperative purchasing has become increasingly popular as a means to simplify procurement, but there are many common pitfalls procurement professionals face throughout the process. With the right strategy and the help of technology, these pitfalls can be avoided.
Cooperative Purchasing is on the Rise for a Reason
Each year, more and more companies are leveraging cooperative contracts to improve their procurement strategies. One of the main drivers is that cooperative purchasing reduces the administrative burden for overworked procurement teams. Piggybacking an existing contract requires far less time and effort than starting from scratch, creating efficiency and velocity throughout the procurement process. Agencies are also able to get better value by combining purchasing power with other agencies on a contract.
The Five Most Common Cooperative Purchasing Pitfalls and How to Avoid Them
Cooperative purchasing is unquestionably a great way to improve procurement strategy, but like any process with multiple steps and different organizations involved, there are some common mistakes made throughout the process. Let's take a look at the top five and how to mitigate them.
1 You’re not getting a competitive price
Cooperative purchasing creates economies of scale which allow buyers to get better pricing, but that doesn’t mean cooperative contracts are offering the best pricing in every single instance. Rates are often negotiated based on different purchasing volumes than your agency might need and very likely might not be as low as a supplier is willing to go.
Reach out to suppliers, especially if there are multiple suppliers available, and do a “bake-off” or compare them against each other. A little competition is healthy and generally results in you getting a better price from a willing supplier.
2 Lack of clarity around expectations
Working with multiple partners in a cooperative contract can lead to a variance in expectations held by each party. If the main drivers behind a cooperative contract are radically different between agencies and that isn’t communicated ahead of time, it can lead to problems down the road.
It’s important to outline expectations ahead of time. There’s a give and take and it requires clarity to alleviate issues. Be vocal about your requirements but willing to accept if a supplier can’t meet your expectations and a contract isn’t a viable option for your agency.
3 Communication problems
Aas a result of manual/legacy processes and dated technology, communication can quickly turn into a roadblock. Emailing, calling, and manually sharing documents often creates inefficiencies that hold up the process or derail it altogether.
Modern technology like CompareCoOps improves communication in cooperative purchasing. While communication and processes used to be siloed by disparate systems, we offer a platform that houses each participant throughout each step of the process, allowing them to interact in one space while guiding them through the process. Silos are removed and everyone is updated and informed at a moment’s notice.
4 There’s a lack of trust
Unfortunately, trust has been an obstacle since cooperative contracts were first put into practice. They’re still relatively new. Many procurement specialists and their legal teams are still learning the intricacies of the cooperative procurement process. It's more a lack of familiarity than anything concrete.
As cooperative purchasing rises in popularity, more vendors are signing on at local levels. Joining a platform like CompareCoOps levels the playing field for vendors. When agencies create a request in our system, suppliers all have an equal opportunity to respond and win the business. It’s important that platforms like CompareCoOps remain agnostic for this very reason. Our comprehensive audit trail and reporting function also help build trust and transparency among users.
5 You’ve lost flexibility and control
While taking on a less active role in the creation and negotiation of a contract frees up your team’s time, it also often means ceding some control over specifics. It’s important to maintain as much flexibility and control as possible while staying in compliance while keeping your end-users happy.
Plan ahead and gain a deep understanding of the contract details as they relate to your needs. When piggybacking, you’re subject to the lead agency’s negotiations. If they amend a contract down the road, those changes now apply to you as well. If you’re only planning on making a one-time purchase or the solicitation period is ending soon, you probably don’t need to worry about this. For longer-lasting contracts, reach out to vendors to negotiate a separate agreement.
How CompareCoOps Helps Agencies Avoid Pitfalls
Our platform is designed around creating a more efficient experience for agencies and suppliers. Alleviating these common pitfalls is at the forefront of our product strategy. As a result, CompareCoOps helps agencies all over the country increase value, savings, transparency, and compliance from their procurement strategies, all while gaining powerful insights to help them make improvements.
The platform model is a perfect match for cooperative purchasing. Keeping agencies, contracts, and suppliers in one place means you no longer have to send countless emails to suppliers, scour different websites or message boards for contracts, or keep up with everything via antiquated methods like spreadsheets.
You can easily identify which cooperative contract provides you with the most savings using our advanced wizard tool. Independently audited data shows that public agency users enjoy cost savings of up to 9.74% when they use CompareCoOps.
Ensuring compliance and transparency through our locked-down processes and a strong audit trail is also extremely simple. You can add all legal requirements, do your due diligence, and get exactly what you want at the best price while becoming a compliance master!
Finally, we offer reporting that goes far beyond simple spend analysis. You can see how buyers go to market for key categories, identify opportunities for efficiencies, and support a culture of continuous improvement in procurement.
At CompareCoOps, we enhance the benefits of cooperative contracts while creating new ones. Our platform is the next evolution of cooperative purchasing. We reduce the time you and your team spend reviewing contracts allowing you to focus on other priorities.
Book a demo with CompareCoOps, or learn more about the platform here.