Cooperative Procurement – How Small Organizations Use the Power of Leverage.

In a June 2017 article from American City and County Michael Keating reports on how Cooperative Procurement plays a key role in Kansas City’s Procurement Strategy.

After reading this article, I had many more questions than answers as Keating fails to explain what “Cooperative Procurement” actually is, so thanks to this, I set out to learn what this concept actually was.

Cooperative Procurement is an interesting concept that was borne out of the need from many small government agencies with limited volume seeking ways of enhancing their buying power.

Basically, the idea is that several small agencies can join together to leverage higher volumes of goods and services for better rates.

In government this works by formally establishing a cooperative group.  There are several cooperatives listed here.  The groups then pool together their collective needs and solicit goods and services from the market.  Their solicitation reflects volumes equal to the sum total of all of the cooperative members.

Basically this work the same as Costco.  A bunch of people who buy the same stuff come together to buy bulk volumes and the Vendor offers a better unit price for everything they sell.

It’s a great concept which should be leveraged more in the private sector.  I for one, will be looking for more opportunities to introduce such ideas in my procurement practice.

What about you?  Have you ever worked with a cooperative?  I would love to hear some first-hand experiences.  What worked?  What did not work?  Tell me your stories.

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