In this series, staff from CoProcure break down the ins and outs of public purchasing.
Local governments are collaborating on procurement to save public staff time and taxpayer dollars. Efforts like the NIGP Columbia Chapter’s ICP group and the Kansas City Regional Purchasing Cooperative help local agencies in a region share the administrative costs of purchasing and aggregate their buying power to achieve cost savings. These regional purchasing collaboration efforts offer lessons to public agencies. Here, we highlight the work of one successful regional purchasing collaboration initiative, the Strategic Alliance for Volume Expenditures (S.A.V.E.).
What is the Strategic Alliance for Volume Expenditures (S.A.V.E.)?
S.A.V.E. is a consortium, created in 1999 by public purchasers, of local government entities and special districts in Arizona. It aims to help buyers share information across a network of public purchasers and capture efficiency-gains through purchasing collaboration. S.A.V.E. members are encouraged to include cooperative clauses in their contracts so other S.A.V.E. agencies can easily use them. S.A.V.E. members also frequently issue notifications to their peer agencies in advance of upcoming purchases. This allows other members to share their demand and participate in a shared solicitation. By aggregating their buying power, S.A.V.E. members can achieve lower costs for participating entities.
The City of Mesa, AZ now manages the administration of S.A.V.E.. Mesa has spearheaded the creation of a user-friendly online resource for members that lists existing contracts and serves as a forum for members to discuss issues or share best practices. According to Matt Bauer, Procurement Administrator for the City of Mesa, “S.A.V.E. helped open the door to show everyone that other agencies are buying the same things, and it just doesn’t make sense for us not to try and work together to purchase items that we all buy on a regular basis.” Today, S.A.V.E. has grown to include more than 300 local agencies of all types from across the State of Arizona and continues to build its database of cooperative contracts from its members.
What innovations make S.A.V.E successful?
Providing a forum for discussion and information sharing
One of the clear benefits of S.A.V.E. that has emerged as membership has increased, and technology has evolved, is the way it has fostered communication between members. For several years, members communicated with one another via an email listserv where an individual could raise an issue or ask a question. While email is still used, a few years ago, the City of Mesa introduced a discussion forum when it launched the new S.A.V.E. website.
According to Kristy Garcia, Senior Procurement Officer with the City of Mesa, the forum improves upon the previous email listserv because it allows all members to view a history of replies so everyone can see if an issue has come up before and whether another member shared their experiences or suggestions. As a result, the forum is an incredibly valuable resource for peer-to-peer sharing, particularly when members need a quick answer for an upcoming purchase or contract amendment. “A lot of times, this is where agencies will need S.A.V.E. the most; it has become a positive communication channel that wasn’t available before,” says Bauer.
Facilitating joint solicitations
Initially, one of the core missions of S.A.V.E. was to help members achieve cost savings by making it easier to run joint solicitations. From a legal perspective, S.A.V.E. paved the way for this coordination by creating an intergovernmental cooperative agreement that outlined the roles and responsibilities of those running the solicitations, as well as those members that decided to join. As a result, S.A.V.E. members that are running solicitations for commonly-purchased goods or services will often notify the group to ask if other members are interested in joining the solicitation. This offers members the opportunity to buy something through a competitive process that they do not need to administer themselves. Although it can be difficult for the lead agency to collect the myriad requirements of members, by running one shared solicitation process, members often achieve cost savings by pooling their purchasing power across a region.
Making existing contracts accessible for purchasing or research
S.A.V.E. also helps make contracts from its members available online, so members can utilize those contracts for purchasing or for research purposes.
When running a bid solicitation to generate a new contract, S.A.V.E. members are encouraged to be transparent with the supplier community and include an explanation of S.A.V.E. in the solicitation and contract. Suppliers can opt into providing the negotiated terms and conditions to other S.A.V.E. members. S.A.V.E. posts the contracts with suppliers that have opted in to piggybacking in their database, which helps members locate and buy off an existing contract. Although smaller agencies are most likely to receive a cost reduction when using the existing contracts, Bauer says, “there are times where we at the City of Mesa can find contracts from smaller jurisdictions that have achieved better terms or conditions.”
An added benefit is that agencies can also fast-track their research process by finding a strong scope of work that can be modified for their own solicitation. According to Bauer, the database is particularly useful, “when we are buying something new that we haven’t bought before and can come together with a member agency that has bought that item and share lessons learned.”
S.A.V.E. has created an open and transparent contracting environment where members feel comfortable sharing and borrowing from each other’s work.
Sofia Jordan is a Master of Public Policy graduate student at UC Berkeley’s Goldman School and a public policy intern at CoProcure. Previously, she served at the Chilean Antitrust Agency, where she helped successfully convict three pharmaceutical labs for corruption in public bidding. CoProcure is an early-stage venture-backed startup optimizing local public procurement by helping local governments share contracts