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Can Cooperative Procurement Help Meet your Social Goals?

Monday, June 25, 2018  
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For many agencies, the month of July marks the start of a new fiscal year. While cooperative contracting is used to save time in the solicitation process or in pricing, have you ever considered cooperative purchasing as a unique way to meet your organization’s social goals too?  Many municipalities, school districts and universities may have certain social goals to be met through their awarded contracts.  Supporting initiatives such as increased MWBE participation, environmental stewardship, or fair labor practices and by pooling their buying power, governments increase the value of contracts, which may ultimately lead to influencing industries and society.  Government purchasing teams can advance social change through purchasing requirements and subcontractors, with cooperative contracts as a possible solution toward that cause.


Minority and Women-Owned Business Enterprises
Many governments have goals or policies that the procurement department must meet related to MWBEs’ share of contracting dollars.  Cooperative contracts allow purchasing departments to encourage national vendors to subcontract with local and MWBEs, providing an additional way to adhere to those policies or goals.


The focus on MWBEs in government contracting is nationwide.  Maryland has a goal of 29% of contracting dollars to be awarded to MWBEs.  In Indiana, the Governor’s Commission on Minority and Women’s Business Enterprises sets different goals for both minority and women-owned business contract dollar shares for construction, supplies, and services every year.  In 2014, Governor Andrew Cuomo raised New York State’s MWBE contracting goal to 30%.  And it’s not just states that are focusing on procurement to promote MWBEs – Houston ISD has a 20% MWBE participation goal for contracts over $50,000 and in 2016 Mayor Bill deBlasio pledged that New York City would award 30% of contract dollars to MWBEs by 2021.


Environmental Purchasing
If environmental responsibility is the goal of a government or administration, cooperative purchasing is an effective tool to achieve environmentally preferred products (EPPs) availability and pricing.  


Cooperative purchasing affords governments the ability aggregate demand across the country, allowing governments to pool their buying power.  Collectively, this purchasing power means that governments can both increase requirements for EPPS or environmentally preferred practices, and possibly drive down the pricing for both.  In addition, a cooperative contract that sets sustainability goals or metrics can foster innovation in the vendor community as vendors seek to find ways to meet those goals or metrics.


As environmental issues have become more important to governments and administrations in the last 20 years, it has gotten easier to identify ways to use purchasing to support these goals.  Many national and international certifications exist to assist the cooperative sourcing team in developing requirements or evaluating proposals with green purchasing components or goals.  In addition, there are several comprehensive guides to green purchasing available online, including from NASPO (http://www.naspo.org/green/index.html) and the Responsible Purchasing Network (RPN) (http://www.responsiblepurchasing.org/).  


Fair Labor and Sweatshops
In recent years there has been a push by some governments to source only from companies that do not practice certain labor practices, such as the use of sweatshop labor.  “Sweatfree” contracts aim to curb unfair labor practices in the production of garments purchased by governments (such as uniforms for police, fire, and other personnel or inmate clothing).  In a similar manner to green purchasing, cooperative contracting, by way of demand aggregation, can affect change at the national level and require vendors to use suppliers that use ethical practices in garment manufacturing.   


Fair labor practices as criteria for contract award is nothing new.  The states of Maine and Vermont have statutes mandating the use of sweatfree vendors, and the cities of Portland and Seattle have resolutions and policies specifying procurement from sweatfree producers. In 2015, the city of Madison, WI (http://buysweatfree.org/uniform_management_program) awarded a contract that is available for piggyback for “public safety, general trade, supervisory and dress apparel, t-shirts and cottonwear that are typically used by Fire, Metro Transit, Police and other municipal operations agencies.”  Cooperative purchasing contracts allow state and local governments to use their purchasing power to further the use of fair labor practices and other social causes.


Saving Money is Not the Only Reason to Use Cooperatives
Cooperative purchasing has many benefits – from delivery and service upgrades to price reductions due to economies of scale.  The aggregation of demand nationwide allows governments to unite on social goals and effect change through contracting. While one state or city may not be able to influence an industry, a coalition of governments with enough purchasing power certainly can.  

 

National Cooperative Procurement Partners | 4248 Park Glen Rd.| Minneapolis, MN 55416 | 952.928.4660 | info@ncppassociation.org

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