This article discusses the following topics regarding cooperative contracts:
- Primary purposes of the agreements
- Entities able to procure goods under cooperative contracts or agreements
- Common products included in cooperative procurements
- Key benefits achieved with government contracts
- Streamlined advantages of cooperative procurements for spending COVID relief funding
- Coordination of buying activities across multiple government agencies
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A cooperative contract is an agreement between a local, state, regional, or federal government and businesses. The contract secures affordable rates and establishes delivery terms on goods that many agencies or offices need to have.
The scope of products covered by cooperative contracts has expanded due to the digitization of government operations. There are other benefits to agencies that purchase through cooperative catalogs beyond price.
The following is an overview of cooperative contracts, along with a look at common products and the key benefits of these agreements.
Cooperative contracts are also known as cooperative agreements, cooperative procurements, or government contracts. These agreements are established between a local, state, or federal government and businesses.
The contract establishes price points, delivery timelines, and other terms by which offices and agencies of the government can procure goods. In essence, the government facilitates the buying process as one entity rather than having each office or agency make purchases independently.
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When a state government establishes the cooperative agreement, any entities within that state can participate, including local, county, and special district governments. In some cases, even entities outside of that state can purchase through the contract catalog.
Many cooperative contracts occur at local levels. Any government office or public agency can typically buy under the contract when a local government establishes the agreement. Not all contracts facilitated by local governments are cooperative, though. The contracts would have to specifically indicate their cooperative nature and include common language about the agreement and buying processes.
Sometimes, local jurisdictions organize into regional purchasing groups for the primary purpose of negotiating favorable contract terms. A group of local governments has more bargaining power than each independent government would have on its own.
Cooperative agreements make sense when particular goods are universally needed across many government operators. Gasoline is one historical example. It is typical that government offices have fuel costs associated with employee travel.
Cooperative contracts are only practical when goods are procured in standard units. If the goods have variable sizes, dimensions, or grades, it is more difficult or even impractical to have a standard contractual price.
Other products often included in agreements are:
- Cleaning Supplies
- Computers, Printers, and Accessories
- Lab Supplies
- Medical Supplies
- Office Equipment
- Office Supplies
- Water and Wastewater Equipment
An expanded digital infrastructure has led to some new categories of products and services included in cooperative contracts, such as consulting, software, and other types of technology services.
The most obvious advantage of cooperative contracts is a standard price procured for all agencies operating under the contracting government. The reduced price is based on economies of scale benefits achieved with higher volume across all government offices, as opposed to each purchasing independently.
In some cases, the volume discounts allow government agencies collectively to invest in renovations, upgrades, equipment, or supplies that none of them independently could afford. Part of the value of cooperative agreements is the benefits they indirectly provide to the public. Maintaining low costs on universal items allows for infrastructure improvements to better serve the public and helps minimize the level of dependency on taxpayers.
Beyond price, the following are other key benefits of cooperative contracts:
Simplified buying process: A government contract puts in place all key procedures, pricing, and terms for all covered agencies. This streamlines ordering as opposed to having many different offices negotiating contracts and going through complex buying processes.
Public transparency: The more transparent governments are in the way they spend money, the easier it is to earn and keep public trust. With procured contracts, fair competition exists, and contracts have clearly defined terms.
Efficient delivery: Deliveries become predictable with standard order amounts and regular replenishments. Predictability allows for efficient delivery of goods, which means agencies do not need to hold large stockpiles of items in inventory.
Product consistency: The goods and services used across all government entities are consistent, which reduces or eliminates inequities from one office to the next. Consistency also benefits employees who work out of multiple government offices.
The streamlined nature of cooperative contracts makes them especially useful for governments looking to utilize COVID relief funding. All states and many local jurisdictions were granted funds as part of the federal CARES Act and the American Rescue Plan Act. However, projects and initiatives funded by these regulations must be used by prescribed deadlines.
With contracts already in place, it is simple for agencies to submit orders for goods and services needed for special projects. In some cases, these established contracts can take months off of your project timeline because offices in charge of particular tasks don’t have to receive and evaluate new competitive bids.
COVID-funded projects might also create a need for additional cooperative contracts. If multiple offices are included in projects or are receiving new equipment and supplies, a cooperative agreement simplifies ordering these new items.
Cooperative contracts offer price and efficiency advantages when many agencies under a government umbrella acquire the same goods or services. Negotiating such agreements promotes fair competition and price transparency while also demonstrating budgetary discipline when using public funds. Your government entities get the best possible price, consistency in goods and delivery, and streamlined ordering processes.
One of the ways that your government can coordinate buying activities is through a cloud-based, cross-channel unified communications system. RingCentral offers a best-in-class solution that enables streamlined communication across multiple channels, coordinated scheduling, contact tracking, and many other collaborative advantages.
See our government solutions in action. RingCentral is an Authorized Vendor through NASPO ValuePoint, NCPA, OMNIA Partners, PEPPM, and TIPS. As an Authorized Vendor, RingCentral offers members the opportunity to purchase services at a discounted price without the delay or expense of going to bid. Ask our RingCentral Public Sector vertical associate today about our existing group purchasing contracts and which one is right for you.
Originally published Apr 19, 2022, updated Dec 30, 2022