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What is Cooperative Purchasing?

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Presentation on theme: "What is Cooperative Purchasing?"— Presentation transcript:

1 Introduction to Cooperative Purchasing and HGACBuy The H-GAC Cooperative Purchasing Program

2 What is Cooperative Purchasing?
Consortium or Group Buying pooling the purchasing needs to achieve better value through: Lower prices Increased response Efficient use of time & resources Effective application of expertise

3 Models of Cooperative Purchasing
3-Types Collaborative Model Third-Party Model Hybrid Models

4 Collaborative Model Multiple entities join together Use of joint bids
Lead agencies take turns bidding Use of standardized specifications Commodity procurement more common Better done locally or regionally

5 Third-Party Model One entity bids term contracts
All other entities purchase off the contracts The third-party may not be a user Flexibility through multiple configurations Less input from end user agencies Third-party may charge fee for operations

6 Hybrid Models Combines aspects of Collaborative & Third-party models
Use of host entity Use of shared responsibilities through lead agencies Piggy-backing is less formal

7 Model Comparison Collaborative Model Administrative work shared
No fees Specific purchase Local/regional based More member control Third-party Model Host program handles administration Typically charges fees Blanket/term contracts Not locally tied Less control over procurement process

8 Analyzing a Cooperative Purchasing Program
Decisions must be made on which cooperative contract to utilize Procurement process Fees Structure of program Flexibility

9 WHAT IS H-GAC? The Houston-Galveston Area Council is a Council of Governments and a Political Sub-division of the state of Texas. H-GAC began with an Interlocal Agreement between 13 Gulf Coast Counties primarily to supply planning services to their region. The agency operates under the direction of a Board of Directors made up of 36 elected officials.

10 What is the H-GAC Cooperative Purchasing Program?
Thirty three years ago, the Board of Directors decided that purchasing services were needed to help the region to keep pace with the regional growth surge that was outpacing the local governments’ capabilities. In 1971, the Texas legislature passes the Interlocal Cooperation Act to promote activities among local governments across Texas In 2001, legislation was passed to amend the “act” to allow for nationwide participation in the program.

11 Texas Interlocal Cooperation Act
Government Code, Chapter 791 “Increase the efficiency and effectiveness of local governments by authorizing them to contract, to the greatest possible extent, with one another and with agencies of the state.” Amended September 1, 2001 to include states other than Texas.

12 What is required to participate in the H-GAC Cooperative Purchasing Program?”
Execution of Interlocal contract by local government officials

13 Advantages to Buying through the H-GAC Cooperative Purchasing Program (HGACBuy)
Time Savings Volume purchasing & Discounts 3-Way Partnership between you, the end user, the Vendor and H-GAC Dealing directly with purchasing professionals with more than 200 combined years of expertise. Expedited procurement process. Knowledge that all HGACBuy contracts have been awarded based upon a thorough competitive bid/proposal process.

14 Current HGACBuy Contracts
Ambulances & Fire Apparatus Chem/Bio Detectors, Robots, Rescue, & Safety Equipment Earth Moving & Construction Equip Vehicles, Trucks, & Fleet Equip Tractors, Mowers, Sewer Cleaning, & Street Maintenance Equip Video Conferencing Radio Communications & Interoperability Equip 9-1-1 Systems & Recording Equip Refuse Collection Equip/Containers, & Sewer Inspection Systems School & Transit Buses Street Sweepers & Equipment Trailers Video Surveillance & Traffic Signal Systems Cell Phone & Mobile Satellite Communications

15 Current Service Contracts
Lease Purchase Financing Foodservice Delivery Consulting Environmental Consulting Community Planning Homeland Security Consulting & Training Insurance Consulting Marketing & Public Relations Electricity Aggregation

16 HGACBuy Cooperative Purchasing Program Update
Over 1,600 End Users Over 250 Contractors 37 Major Product Categories $216 million in Products & Services 2005 Activity in Texas & 23 other States

17 Order Activity 2005

18 The Bid Process Products/services researched
Draft specification issued Solicitation advertised Pre-bid conference held Final specification issued Bids publicly opened Bids evaluated, award recommendations made H-GAC Board of Directors makes awards Contracts issued

19 The Procurement Process
Discuss product/service with contractor Contractor issues detailed price quote Make purchase order out to contractor Send copy of PO to H-GAC Contractor delivers and invoices Pay contractor (including administrative fee)

20 Procurement Flexibility
Most contracts are bid with base line items and correlating options The options submitted with the bid are evaluated and considered “published options” For additional flexibility, options may be added to an order that were not included in the bid – “unpublished options” Change Order rules are applied to unpublished options – limiting their use to 25% of an order

21 Administrative Fees The program is “pay as you go”
Cost of operations is covered by an administrative fee issued on each order Administrative fees are either a flat amount per unit, or a percentage of the overall order

22 The HGACBuy Bid Process:
Meets the standards that end user would normally utilize Supporting documentation Approval through governing body End user is substituting the bid process they would normally perform for the process now undertaken by the H-GAC Cooperative Program

23 Usage Fees Are fees actually charged? Who pays for the fees?
End User Vendor How much is the fee? Customer service Ease of use

24 Program Structure History & experience of the cooperative program
Staff size & expertise Where do the contracts come from? Knowledge of the products Contract administration Problem resolution

25 HGACBuy Offers Flexibility
End User has the ability to purchase item as needed which include the base items & options under contract Customization 3-Way Partnership between End User, Vendor and H-GAC

26 Delivering Value Cooperative contracts are only of use if they deliver value Value to the End User Value to the Contractor Stay in the loop Communicate frequently Three-way partnership must be fostered

27 Web site contains pricing & contact information Future functionality may include: Online quotes Product comparisons Order status Contract information

28 Law Enforcement, General Purpose Vehicles, and Buses
Staff Cars Light Trucks Police Cars Vans School Buses

29 EMS and Fire Apparatus Ambulances (Types I,II,II)
Pumper and Tanker Fire Apparatus Aerials & Ladder Platforms Rescue, Haz-Mat, & Command Centers Brush/Wildland Fire Apparatus

30 Medium and Heavy Duty Trucks, and Specialized Bodies
Medium Duty Chassis Heavy Duty Chassis Refuse Collection Bodies Sewer Cleaners Van Bodies Dump Bodies, Aerial Lifts, Cement Mixers, Wreckers, & Water Trucks

31 Communications and Emergency Equipment, and Supplies
Radios, Base Stations & Communication Systems Defibrillators SCBA’s 9-1-1 Systems Wireless Communications Services Chem/Bio Detectors & EOD Robots

32 Public Works and Heavy Equipment
Earth Moving Equipment Tractors & Mowers Traffic Signals Controls Street Maintenance Equipment Street Sweepers Equipment Trailers & Refuse Containers

33 Security and Electronic Equipment
Security Video & Access Control Equipment Traffic Signals Controls Auxiliary Power Generators Sewer Video Inspection Systems

34 Consulting Contracts Insurance Consulting Environmental Consulting
Homeland Security Consulting & Training Community Planning

35 Service Contracts Lease Purchase Financing Electricity Aggregation
Reverse Auction Services Food Products & Equipment Marketing and Communications Public Relations Video Conferencing

36 HGACBuy is a proud member

37 HGACBuy The H-GAC Cooperative Purchasing Program (HGACBuy) recognizes purchasing as a universal profession and has adopted the H-GAC Code of Ethics as stated in the H-GAC Procurement Policy, revised edition dated January 1, 2006 As a member in good standing of the National Institute of Government Purchasing, (NIGP) HGACBuy recognizes that the NIGP sets the universal standards for government procurement and therefore, HGACBuy and its employees are committed to the NIGP Code of Ethics and its principals “Our goal is to provide to all of its members, quality products and services, by reputable vendors, through cost effective, ethical, moral and prudent procurement standards”

38 Questions Contact: HGACBuy Program Staff Phone: 800-926-0234
Fax: Experience the Smart Purchasing Solution Log on to:

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