Did you know… What a Purchasing Consortium is?

If not, you might be missing important contracting opportunities. Many state and local organizations use purchasing consortia to obtain goods and services.

A purchasing consortium – also referred to as cooperative purchasing, or a “GPO” (Group Purchasing Organization) – is a mechanism by which multiple organizations with similar purchasing needs band together to better leverage their buying power and achieve more favorable terms and pricing from vendors. Such consortia also reduce the workload for their members by eliminating duplication of effort in issuing solicitations and managing contracts for the same good/service.

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Written by Jodi Essex
CIRAS Government Contracting Specialist

Small organizations that cannot support large purchasing offices or do not have a sufficient “spend” (ie: high spending volume) to obtain discounts on their own often take advantage of cooperative purchasing. But large organizations participate, too. For example, the purchasing departments of Big 10 universities have formed a purchasing consortium called the Big Ten Academic Alliance. This consortium determines which goods and services the majority of its members are most likely to need, issues an RFP, and then awards a contract that all members are welcome to use.

Purchasing Consortia benefit vendors, too. An agreement with a purchasing consortium provides exposure to customers that a business might not otherwise reach on its own. This saves time and effort by reducing the need to market to multiple organizations and respond to multiple solicitations. As an added bonus, the consortium advertises awarded contracts to its members and encourages their use.

There are several purchasing consortia around the country, many of which focus on a specific field, such as industrial manufacturing, healthcare, food and grocery, higher education, etc. A simple Google search for a particular field, followed by “GPO” or “purchasing consortium”, can help you to identify relevant groups. Below are three examples that have a wide geographic reach:

Big Ten Academic Alliance (BTAA) – http://www.btaa.org/purchasing-and-licensing/purchasing/introduction
This consortium consists of universities in the Big Ten Conference. One university will handle the solicitation process and award a contract that any other members of the consortium can use.  Other universities may “piggyback” on these contracts.  For example, Iowa State University may be invited to use them because the University of Iowa is a member.

E&I Cooperative Services (Educational & Institutional) – https://www.eandi.org/Default.aspx?Menu=TopMenu
This consortium’s members include hospitals, laboratories, museums, K-12 schools, community colleges, universities (public and private), nonprofits such as the Salvation Army, and more. Vendors interested in bidding must fill out their supplier form at http://www.myeandi.org/xoops/html/supplier/supplier.php. It should be noted that while group members are ABLE to purchase off of awarded contracts, they are not required to do so.

National Association of State Purchasing Organizations (NASPO) ValuePoint – https://www.naspovaluepoint.org/
NASPO ValuePoint is the cooperative purchasing organization for state agencies. Like the BTAA, individual states will take the lead on specific solicitations and handle the entire procurement on behalf of the other members.

Contact your PTAC representative with questions or to help you determine if your good/service is a good fit for a purchasing consortium.

 

Jodi Essex can be reached via jodir@iastate.edu or 515-509-0769. For more about the CIRAS PTAC team, visit our website.