U.S. Communities — overview of a government purchasing alliance
by STEVE SWENDIMAN National Association of Counties Financial Services Corporation and U.S. Communities Government Purchasing Program
Purchasing cooperatives have existed for centuries. They provide savings to their participants by aggregating spending volumes and providing access to better pricing, terms and conditions, and access to commodities or services. Cooperatives can be local, regional, state-wide or national. In fact, a number of cooperatives are international.
The U.S. Communities Government Purchasing Alliance came into existence in 1999 through a partnership between two state associations of local governments (the California State Association of Counties and the League of California Cities) and five national associations (the National Association of Counties, the National League of Cities, the Association of School Business Officials, the National Institute of Governmental Purchasing and the United States Conference of Mayors). Borne out of a need to have large-scale commodities contracts to offer local and state agencies on a national basis, in its early days the program focused on creating a platform for voluntary participation by the 87,250 local and state governments in the US.
The program operates as a non-profit instrumentality of government. A board of directors composed of its founding members and an advisory committee composed of professional public purchasing officials from local, state, school and university agencies oversee the program and its policies. Advisory board members also act as lead public agencies on solicitations. As of January 2008 the program offered 16 contracts serviced by 23 suppliers. Over 30,000 local, school, state and non-profit agencies are registered and use the program. In 2007 the total aggregated purchases exceeded $1.3 billion. The estimated savings to public agencies in 2007 through the use of these contracts was $200 million.
U.S. Communities was faced with a number of challenges during its first years of operation. Public agencies expressed concern about the loss of spending to local suppliers. Public agencies have myriad policy directives regarding local spending set-aside programs, requirements for the use of minority, women-owned, veteran-owned, and small business programs, the concern for loss of management control and the concern for political fallout from using a national contract vehicle. U.S. Communities has prided itself on being a fast, flat and flexible organization that responds to the needs of its participants. The program offers the following advantages to the public agency.
All contracts are publicly solicited by a lead public agency on behalf of all governments within the US and Canada.
Any public agency and non-profit that serves public agencies may use the program.
Each public agency may use the program as much or as little as it desires. There are no minimum spending requirements on any of the contracts.
The public agency pays no fees to use the program.
The program offers access to best purchasing and supply practices through its contracts and through its access to the large network of public agencies using the program.
In 2007, U.S. Communities initiated a new program — Canadian Communities. Through its national sponsors, U.S. Communities and representatives from NIGP (National Institute of Governmental Purchasing) and ASBO (Association of School Business Officials) International in Canada worked together to create an opportunity for Canadian public agencies to piggyback on contracts solicited and awarded by the U.S. Communities lead public agencies. This initial foray into international relations enables both US and Canadian public agencies to benefit from cooperative contracts.
U.S. Communities program managers employ around 15 full-time people to support the program and to work with suppliers and public agencies to promote and improve the program. Suppliers pay a small administrative fee to U.S. Communities. These fees pay the costs of administration, auditing, marketing, training, product development and sponsorship of the program. Additionally, over 70 state associations of schools, cities and counties sponsor the program.
Steve Swendiman CEO, The National Association of Counties Financial Services Corporation, and Co-manager, The U.S. Communities Government Purchasing Program, <SSwendim@naco.org>.
