PRINCIPLES AND ELEMENTS OF COOPERATIVE AGREEMENTS

1. PRINCIPLES AND ELEMENTS OF COOPERATIVE AGREEMENTS Jon Manning, CPPB Buyer II, County of Placer October 10, 2014

2. Please note that agencies should always check with their legal counsel first before using any of the cooperative contracts, other cooperative purchasing options, or any other information provided in this presentation.

3. WHAT IS A COOPERATIVE AGREEMENT? • A cooperative agreement represents the mutual needs for the same goods or services of two or more organizations/agencies.

4. DIFFERENT TYPES OF COOPERATIVE AGREEMENTS TRUE COOPERATIVES THIRD-PARTY AGGREGATORS Independent agency/organization whose primary purpose is to award contracts representing the common requirements of two or more agencies. Most third-party aggregators require agencies to become members of their cooperative before using their contracts. Contracts are managed by the independent agency/organization. • Two or more agencies that combine their requirements for similar goods or services into one competitive solicitation (RFP, IFB, etc.) to obtain volume pricing. • Requires collaborative effort to develop specifications, terms, and conditions for bid document. • Typically a “lead agency” will conduct the competitive process.

5. DIFFERENT TYPES OF COOPERATIVE AGREEMENTS (continued) COOPERATIVE CONTRACTS • Multiple agencies that purchase goods or services off a single contract that was awarded by another organization/agency. • Also known as “piggyback”, “rider”, or “bridge” contracts. • Typically cooperative contracts specifically state within the competitive solicitation that other agencies may use the resulting agreement.

6. SURVEY QUESTION: does your agency allow the use of cooperative agreements to purchase goods or services?

7. Benefits of using a cooperative agreement • Saves time/effort • Cost savings • Higher quality of products/services • Program rebates (if applicable) • Solid enforceable contract • Convenience • Efficient delivery • Allows your agency to focus on other tasks/projects • Expanded pricing tiers (if applicable)

8. DRAWBACKS TO USING A COOPERATIVE AGREEMENT • Pricing is not always guaranteed to be lowest or best value • Operational/logistical problems • Not enough contract choices/options • Lack of service/not responsive to customer service related issues • Lack of transparency (contract docs) • Scope of work/specifications may not fully meet your agency’s needs • Typically does not include/consider local vendors

9. Goods/services commonly available from cooperative agreements Include: • Office Supplies • Audio/Visual Equipment • IT Hardware • Vehicles • Heavy Equipment • Furniture • Food • Janitorial Supplies • Drugs/Pharmaceuticals • Scientific/Lab Equipment & Supplies • Classroom Supplies • Fuel • Mowers/Grounds Maintenance Equipment • Building/Construction Supplies and Hardware • Logistics Services • Mailing Equipment • Footwear and Uniforms • Auto Parts • Exercise Equipment • Document Shredding Services • Office Machines (copiers) • Electronic/Offender Monitoring Services • Cloud Hosting Services

10. Common cooperatives available to use • WSCA-NASPO Cooperative Purchasing Organization - http://www.aboutwsca.org • National IPA - http://www.nationalipa.org/ • National Joint Powers Alliance (NJPA) - http://www.njpacoop.org/ • State of California Department of General Services - http://www.dgs.ca.gov/pd/Home.aspx • US Communities - http://www.uscommunities.org/ • The Cooperative Purchasing Network (TCPN) - http://www.tcpn.org/Pages/default.aspx • National Cooperative Purchasing Alliance (NCPA) – http://ncpa.us/Home • ProcureSource (Cooperative Contract Directory) - https://www.procuresource.com/

11. uncommon cooperatives available to use • CalACT/MBTA Purchasing Cooperative (Transit Vehicles) - http://www.calact.org/purchasingco-op • CalSAVE (School equipment and supplies, IT solutions) - http://www.calsave.org/index.html • FireRescue Group Purchasing Organization (FRGPO) - http://www.firerescue-gpo.com • National Purchasing Partners (NPP) - http://www.nppgovernment.com/ • HGACBuy- https://www.hgacbuy.org/home/ • PEPPM Technology Bidding and Purchasing Program - http://www.peppm.org/ • Keystone Purchasing Network (KPN) – http://www.thekpn.org/ • NIGP Cooperative Purchasing Programs Directory - http://www.nigp.org/eweb/StartPage.aspx?Site=NIGP&webcode=rsl_pc_links

12. SURVEY QUESTION: do you know of any other cooperatives that were not mentioned?

13. QUESTIONS TO ASK BEFORE USING A COOPERATIVE AGREEMENT • Does the lead agency require membership prior to using the cooperative agreement? • Was the contract awarded by a public agency? • Does the agreement comply with your codes/regulations? • Was the cooperative agreement competitively bid or negotiated? • Is the contract current and in effect for all proposed purchases? • Are there any fees associated with using the agreement? • Is this cooperative agreement the most advantageous solution? • What was the award amount of the original solicitation?

14. TIPS FOR PERFORMING DUE DILIGENCE (1) • LEGAL - Verify that your code/laws/policy allows your agency to use the cooperative agreement. • MEMBERSHIP – Review membership terms and conditions and related paperwork. • DO YOUR HOMEWORK – Research the cooperative organization to determine what type of organization the cooperative is. • COOPERATIVE AGREEMENT – Review the following documents: • Original solicitation (including specifications/scope) • Evaluation and award summary • Copy of the successful bid or proposal • Complete final contract (signed) • Any other documents required by the contract

15. TIPS FOR PERFORMING DUE DILIGENCE (2) • CONTRACT AWARD – Is the award sound and justifiable? • TERMS AND CONDITIONS – Review for potential conflicts. • RESEARCH OTHER COOPERATIVES – Look for other cooperative agreements that might offer the same goods/services.

16. ARE YOU READY TO CONDUCT YOUR OWN TRUE COOPERATIVE AGREEMENT?

17. Prep work (Pre-solicitation) • Identify potential commodity to bid out • Identify potential partner agencies • Determine lead agency (volunteer) • Gather information from partner agencies regarding: • Definite quantity and delivery; or • Indefinite quantity and delivery • Product description • Requirements • Specifications • Delivery locations • Historical spend data

18. PREP WORK (PRE-SOLICITATION) • Develop rough draft of solicitation document, specifications, scope of work/service, delivery, terms, conditions, and sample contract. • Send the rough draft to all participating agencies for review and comments. • ADMINISTRATIVE FEES: • Offsets the costs of staff time and other resources for the lead agency. • Must be stated up front in the solicitation document with the calculating formula and provisions clearly defined. • Understand that the higher the administrative fees are the less advantageous the pricing will be (negates the benefit of the cooperative).

19. Go! (issuing the SOLICITATION) • Use vendor lists from participating agencies to send notices to. • Advertise the solicitation in accordance with prevailing laws. • Post the solicitation on the lead agency’s website. • Designate one point-of-contact for inquiries/questions. • Notify the participating agencies that the solicitation has been released and provide them with copies of the final documents. • Lead agency shall be responsible for all addendums, pre-proposal conferences, etc.

20. Evaluation and award • Lead agency shall receive, open, and tabulate the responses to the solicitation. • The lead agency shall evaluate the solicitation in accordance with the prescribed evaluation methodology. • The lead agency shall negotiate terms and conditions and any other elements as-needed. • The lead agency will make a recommendation for award to their governing board (if applicable). • Once the solicitation has been awarded the lead agency will distribute copies of the solicitation documents to the participating agencies.

21. Post-award • Lead agency shall administer its own contract award. • Participating agencies are responsible for obtaining approval from their individual governing bodies to execute a contract with the awarded vendor(s). • Lead agency provides assistance in resolving problems relating to the contract/solicitation; participating agencies can resolve problems relating to their executed contract. • Lead agency should develop and distribute a contractor/vendor performance reporting form for participating agencies to use. • Lead agency should obtain regularly scheduled contract sales reports. • Lead agency should schedule meetings with the contract vendor(s) to review performance reports and discuss any other related issues.

22. Keys to a successful cooperative • Solid Solicitation Document and Process • Include Technical Specialists/Experts • Clear, Concise Award Documents • Transparency/Accessible Information • Effective Communication • Effective Leadership

23. Future of cooperative agreements

24. conclusion • Cooperative agreements are a great tool to agencies • Exercise caution and due diligence – cooperatives should not be used as a “catch-all” • Don’t be afraid to collaborate with other agencies when a common need is identified – potential for cost savings.