Global Best Practice - Use of Cooperative Contracts for Public Procurement
- Cooperative Procurement
The phrase cooperative procurement refers to the process of combining requirements for two or more public procurement entities to get the benefits of volume purchasing, delivery and supply chain advantages, best practices, and the reduction of administrative time and expenses. As a result of cooperative procurement efforts, other entities may create contracts that "piggyback" to gain economies of scale they would not otherwise receive if they competed on their own. By using cooperative contracts, procurement entities can lower prices and administrative costs while increasing competition that would then lead to more favorable terms and conditions within the contract. When using cooperative contracts, procurement professionals must ensure the contracts are legally compliant and use time and resources in the most efficient and effective ways possible. Not all jurisdictions allow for participation in cooperative contracts. This means it's essential to thoroughly research the legal regulations imposed in jurisdictions by conducting extensive market research and due diligence. This practice includes an extensive checklist for procurement determine if it makes sense to enter into a cooperative contract.