Collaborative procurement has become essential in today's fast-paced environment, where efficiency and cost-effectiveness are paramount. National purchasing cooperatives and state entities play a pivotal role in providing the necessary resources and expertise for successful cooperative contracting. In South Florida, two influential models have emerged to support local collaboration. One model is led by Miami-Dade County, while the other is a regional cooperative out of the SE Florida NIGP Chapter. Leaders from both groups have shared insights into the benefits and challenges of these models, offering actionable insights that can be applied to enhance purchasing collaboration within your own region.
Benefits of piggybacking
Increasingly, local entities are collaborating on procurement to save time and money. Local collaboration offers several benefits to consider:
Defray staff time and save money: Benefit from pricing negotiated by the original entity as well as reduced administrative costs associated with the procurement process.
Access to more suppliers: Local entities are more likely to be working with local and diverse suppliers also relevant to you.
Unlock additional categories: Local contracts can cover categories of procurements you may not have thought available, especially services that need to be administered locally.
Opportunity to generate revenue: Consider implementing a small rebate or fee when others leverage your contracts. Revenue generated can fund a myriad of programs from team professional development to strategic programs.
Keith Glatz Purchasing and Contracts Manager, City of Tamarac and SE Florida cooperative member
“Our city has made recent changes that restrict our ability to piggyback; we usually award about 30 contracts a year, this year we’ll end up awarding 45-50. In order to support the increased workload that comes with going out to bid, we’ll have to rely on staff augmentation. We estimate this will cost $14,000-$20,000. You can really see the value of piggybacking when you look at the type of cost avoidance we could have by piggybacking.”
Christopher Grant-Henriques Procurement Contracting Officer 3, Miami-Dade County
“We have to take a lot into account when going out to bid: cost, terms, different department needs, opportunities to work with local suppliers. As a result, it can take us anywhere from 6-24 months to award a contract. There are many times that, due to our administrative process or urgency of procurement, our solicitation process won’t work. Piggybacking off local entities allows us to meet our needs while making a purchase a quickly.”
A comparison: a county-led model vs a regional cooperative
Miami-Dade County created their User Access Program (UAP) which applies a 2% fee to every contract created by the county. The 2% fee collected any time a county contract is used, whether that's by an internal department or a piggybacking entity. This program is designed to defray the costs associated with procurement and bring value back to the team involved in the process.
What makes the program truly special is that when another entity piggybacks a contract, Miami-Dade County engages in a revenue-sharing agreement. In this arrangement, the county shares revenue and rebates the piggybacking entities with 0.5% of the fee they collect. This revenue structure is highly innovative and unique, as no similar models have been observed elsewhere in the country.
The Southeast Florida Governmental Purchasing Cooperative was established in response to challenges faced by members of the NIGP chapter in managing their workload. The cooperative has a spcecial model: It divides up purchases for several shared needs across its members. Instead of having each member run its own individual solicitations, one member agency runs a bid on behalf of the whole group.
The cooperative does not require any financial investment from its members and does not generate revenue. Its primary purpose is to benefit the chapter members. Only agencies belonging to the cooperative are eligable to participate, and members are obligated to respond to all solicitations due to the substantial effort involved in creating contracts.
Benefits
Piggybacking entities are able to access the volume discounts that Miami-Dade is able to acquire.
Suppliers are able to grow their business with more entities across the state.
Incentivizes internal departments to always look for and use their own contracts.
Revenue for both Miami-Dade and piggybacking entities, Miami-Dade has generated $14M in a fiscal year with this model.
Benefits
Ability to incorporate more volatile procurements that don’t work well with a national cooperative. For example, complicated deliveries that require special equipement.
Organized, facilitated, and frequent communication between purchasing officers.
Tactics for leveling up piggybacking at your entity
Leveraging local contracts and collaborating with neighbors may be easier than you think - you may even already be doing some of these best practices at your entity:
Publish your contracts online: Publish a regularly updated list of open solicitations as well as contracts so that neighboring agencies can see what goods and services your agency has purchased. Pavilion can help you with this!
Local purchasing group participation: consider joining local purchasing group, formal or informal, where you share information such as upcoming procurements and/or existing contracts. Check out all of NIGPs existing chapters here.
Use Pavilion to find local piggyback contract options: Pavilion’s database aggregates contracts from 400+ local, state, and national entities. Pavilion is free for public entities and is a powerful tool for helping you make the best purchasing decision with ease and speed. Schedule a personalized walkthrough to learn more today.
Christopher Grant-Henriques Procurement Contracting Officer 3, Miami-Dade County
“Miami-Dade County provides intensive training to the procurement staff, which includes cooperative web applications such as Pavilion. The ease of use and information provided by web applications like Pavilion have unlocked another level of efficiency in identifying market trends and piggybacking opportunities.”
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