Introduction to Cooperative Purchasing and HGACBuy T he H-GAC Cooperative Purchasing Program

Introductionto

Cooperative Purchasingand

HGACBuy

The H-GAC Cooperative Purchasing

Program

Introductionto

Cooperative Purchasingand

HGACBuy

The H-GAC Cooperative Purchasing

Program

What is Cooperative Purchasing?What is Cooperative Purchasing?

• Consortium or Group Buying pooling the

purchasing needs to achieve better value

through:

– Lower prices

– Increased response

– Efficient use of time & resources

– Effective application of expertise

• Consortium or Group Buying pooling the

purchasing needs to achieve better value

through:

– Lower prices

– Increased response

– Efficient use of time & resources

– Effective application of expertise

Models of Cooperative PurchasingModels of Cooperative Purchasing

3-Types

Collaborative Model

Third-Party Model

Hybrid Models

3-Types

Collaborative Model

Third-Party Model

Hybrid Models

Collaborative ModelCollaborative Model

• Multiple entities join together

• Use of joint bids

• Lead agencies take turns bidding

• Use of standardized specifications

• Commodity procurement more common

• Better done locally or regionally

• Multiple entities join together

• Use of joint bids

• Lead agencies take turns bidding

• Use of standardized specifications

• Commodity procurement more common

• Better done locally or regionally

Third-Party ModelThird-Party Model

• One entity bids term contracts

• All other entities purchase off the contracts

• The third-party may not be a user

• Flexibility through multiple configurations

• Less input from end user agencies

• Third-party may charge fee for operations

• One entity bids term contracts

• All other entities purchase off the contracts

• The third-party may not be a user

• Flexibility through multiple configurations

• Less input from end user agencies

• Third-party may charge fee for operations

Hybrid ModelsHybrid Models

• Combines aspects of Collaborative &

Third-party models

• Use of host entity

• Use of shared responsibilities through lead

agencies

• Piggy-backing is less formal

• Combines aspects of Collaborative &

Third-party models

• Use of host entity

• Use of shared responsibilities through lead

agencies

• Piggy-backing is less formal

Model ComparisonModel Comparison

Collaborative Model• Administrative work

shared• No fees• Specific purchase• Local/regional based• More member control

Third-party Model

Collaborative Model• Administrative work

shared• No fees• Specific purchase• Local/regional based• More member control

Third-party Model

• Host program handles administration

• Typically charges fees• Blanket/term

contracts• Not locally tied• Less control over

procurement process

• Host program handles administration

• Typically charges fees• Blanket/term

contracts• Not locally tied• Less control over

procurement process

Analyzing a Cooperative Purchasing ProgramAnalyzing a Cooperative Purchasing Program

• Decisions must be made on which

cooperative contract to utilize

– Procurement process

– Fees

– Structure of program

– Flexibility

• Decisions must be made on which

cooperative contract to utilize

– Procurement process

– Fees

– Structure of program

– Flexibility

WHAT IS H-GAC?WHAT IS H-GAC?• The Houston-Galveston Area Council is a

Council of Governments and a Political Sub-division of the state of Texas.

• H-GAC began with an Interlocal Agreement between 13 Gulf Coast Counties primarily to supply planning services to their region.

• The agency operates under the direction of a Board of Directors made up of 36 elected officials.

• The Houston-Galveston Area Council is a Council of Governments and a Political Sub-division of the state of Texas.

• H-GAC began with an Interlocal Agreement between 13 Gulf Coast Counties primarily to supply planning services to their region.

• The agency operates under the direction of a Board of Directors made up of 36 elected officials.

What is the H-GAC Cooperative Purchasing Program?What is the H-GAC Cooperative Purchasing Program?• Thirty three years ago, the Board of Directors

decided that purchasing services were needed to help the region to keep pace with the regional growth surge that was outpacing the local governments’ capabilities.

• In 1971, the Texas legislature passes the Interlocal Cooperation Act to promote activities among local governments across Texas

• In 2001, legislation was passed to amend the “act” to allow for nationwide participation in the program.

• Thirty three years ago, the Board of Directors decided that purchasing services were needed to help the region to keep pace with the regional growth surge that was outpacing the local governments’ capabilities.

• In 1971, the Texas legislature passes the Interlocal Cooperation Act to promote activities among local governments across Texas

• In 2001, legislation was passed to amend the “act” to allow for nationwide participation in the program.

Texas Interlocal Cooperation ActTexas Interlocal Cooperation ActGovernment Code, Chapter 791

“Increase the efficiency and effectiveness of local governments by authorizing them to contract, to the greatest possible extent, with one another and with agencies of the state.” Amended September 1, 2001 to include states other than Texas.

Government Code, Chapter 791

“Increase the efficiency and effectiveness of local governments by authorizing them to contract, to the greatest possible extent, with one another and with agencies of the state.” Amended September 1, 2001 to include states other than Texas.

What is required to participate inthe H-GAC Cooperative Purchasing Program?”

What is required to participate inthe H-GAC Cooperative Purchasing Program?”

• Execution of Interlocal contract by local

government officials

• Execution of Interlocal contract by local

government officials

Advantages to Buying through the H-GAC Cooperative Purchasing Program (HGACBuy)

Advantages to Buying through the H-GAC Cooperative Purchasing Program (HGACBuy)• Time Savings

• Volume purchasing & Discounts

• 3-Way Partnership between you, the end user, the Vendor and

H-GAC

• Dealing directly with purchasing professionals with more than

200 combined years of expertise.

• Expedited procurement process.

• Knowledge that all HGACBuy contracts have been awarded

based upon a thorough competitive bid/proposal process.

• Time Savings

• Volume purchasing & Discounts

• 3-Way Partnership between you, the end user, the Vendor and

H-GAC

• Dealing directly with purchasing professionals with more than

200 combined years of expertise.

• Expedited procurement process.

• Knowledge that all HGACBuy contracts have been awarded

based upon a thorough competitive bid/proposal process.

Current HGACBuy ContractsCurrent HGACBuy Contracts

• Ambulances & Fire Apparatus

• Chem/Bio Detectors, Robots, Rescue, & Safety Equipment

• Earth Moving & Construction Equip

• Vehicles, Trucks, & Fleet Equip

• Tractors, Mowers, Sewer Cleaning, & Street Maintenance Equip

• Video Conferencing

• Ambulances & Fire Apparatus

• Chem/Bio Detectors, Robots, Rescue, & Safety Equipment

• Earth Moving & Construction Equip

• Vehicles, Trucks, & Fleet Equip

• Tractors, Mowers, Sewer Cleaning, & Street Maintenance Equip

• Video Conferencing

• Radio Communications & Interoperability Equip

• 9-1-1 Systems & Recording Equip

• Refuse Collection Equip/Containers, & Sewer Inspection Systems

• School & Transit Buses• Street Sweepers &

Equipment Trailers• Video Surveillance &

Traffic Signal Systems• Cell Phone & Mobile

Satellite Communications

• Radio Communications & Interoperability Equip

• 9-1-1 Systems & Recording Equip

• Refuse Collection Equip/Containers, & Sewer Inspection Systems

• School & Transit Buses• Street Sweepers &

Equipment Trailers• Video Surveillance &

Traffic Signal Systems• Cell Phone & Mobile

Satellite Communications

Current Service ContractsCurrent Service Contracts

• Lease Purchase Financing• Foodservice Delivery• Consulting

– Environmental Consulting– Community Planning– Homeland Security Consulting & Training– Insurance Consulting

• Marketing & Public Relations• Electricity Aggregation

• Lease Purchase Financing• Foodservice Delivery• Consulting

– Environmental Consulting– Community Planning– Homeland Security Consulting & Training– Insurance Consulting

• Marketing & Public Relations• Electricity Aggregation

HGACBuy Cooperative Purchasing Program UpdateHGACBuy Cooperative Purchasing Program Update

• Over 1,600 End Users

• Over 250 Contractors

• 37 Major Product Categories

• $216 million in Products & Services 2005

• Activity in Texas & 23 other States

• Over 1,600 End Users

• Over 250 Contractors

• 37 Major Product Categories

• $216 million in Products & Services 2005

• Activity in Texas & 23 other States

Order Activity 2005Order Activity 2005All Others

Street Sweepers Ambulances

Heavy Trucks & Bodies

Grounds & R.O.W.

EquipmentFire Apparatus

Earth moving Equipment

Cars & Light Trucks

Radio Communications

Equipment

School Buses

Street Maintenance Equipment

The Bid ProcessThe Bid Process

• Products/services researched• Draft specification issued• Solicitation advertised• Pre-bid conference held• Final specification issued• Bids publicly opened• Bids evaluated, award recommendations

made• H-GAC Board of Directors makes awards• Contracts issued

• Products/services researched• Draft specification issued• Solicitation advertised• Pre-bid conference held• Final specification issued• Bids publicly opened• Bids evaluated, award recommendations

made• H-GAC Board of Directors makes awards• Contracts issued

The Procurement ProcessThe Procurement Process

• Discuss product/service with contractor

• Contractor issues detailed price quote

• Make purchase order out to contractor

• Send copy of PO to H-GAC

• Contractor delivers and invoices

• Pay contractor (including administrative fee)

• Discuss product/service with contractor

• Contractor issues detailed price quote

• Make purchase order out to contractor

• Send copy of PO to H-GAC

• Contractor delivers and invoices

• Pay contractor (including administrative fee)

Procurement FlexibilityProcurement Flexibility

• Most contracts are bid with base line items and correlating options

• The options submitted with the bid are evaluated and considered “published options”

• For additional flexibility, options may be added to an order that were not included in the bid – “unpublished options”

• Change Order rules are applied to unpublished options – limiting their use to 25% of an order

• Most contracts are bid with base line items and correlating options

• The options submitted with the bid are evaluated and considered “published options”

• For additional flexibility, options may be added to an order that were not included in the bid – “unpublished options”

• Change Order rules are applied to unpublished options – limiting their use to 25% of an order

Administrative FeesAdministrative Fees

• The program is “pay as you go”

• Cost of operations is covered by an

administrative fee issued on each order

• Administrative fees are either a flat amount

per unit, or a percentage of the overall order

• The program is “pay as you go”

• Cost of operations is covered by an

administrative fee issued on each order

• Administrative fees are either a flat amount

per unit, or a percentage of the overall order

The HGACBuy Bid Process:The HGACBuy Bid Process:

• Meets the standards that end user would

normally utilize

• Supporting documentation

• Approval through governing body

• End user is substituting the bid process they

would normally perform for the process now

undertaken by the H-GAC Cooperative

Program

• Meets the standards that end user would

normally utilize

• Supporting documentation

• Approval through governing body

• End user is substituting the bid process they

would normally perform for the process now

undertaken by the H-GAC Cooperative

Program

Usage FeesUsage Fees

• Are fees actually charged?

• Who pays for the fees?– End User

– Vendor

• How much is the fee?

• Customer service

• Ease of use

• Are fees actually charged?

• Who pays for the fees?– End User

– Vendor

• How much is the fee?

• Customer service

• Ease of use

Program StructureProgram Structure

• History & experience of the cooperative program

• Staff size & expertise

• Where do the contracts come from?

• Knowledge of the products

• Contract administration

• Problem resolution

• History & experience of the cooperative program

• Staff size & expertise

• Where do the contracts come from?

• Knowledge of the products

• Contract administration

• Problem resolution

HGACBuy Offers FlexibilityHGACBuy Offers Flexibility

• End User has the ability to purchase item as needed

which include the base items & options under contract

• Customization

• 3-Way Partnership between End User, Vendor and

H-GAC

• End User has the ability to purchase item as needed

which include the base items & options under contract

• Customization

• 3-Way Partnership between End User, Vendor and

H-GAC

Delivering ValueDelivering Value

• Cooperative contracts are only of use if they deliver value– Value to the End User

– Value to the Contractor

• Stay in the loop

• Communicate frequently

• Three-way partnership must be fostered

• Cooperative contracts are only of use if they deliver value– Value to the End User

– Value to the Contractor

• Stay in the loop

• Communicate frequently

• Three-way partnership must be fostered

www.HGACBuy.orgwww.HGACBuy.org

• Web site contains pricing & contact

information

• Future functionality may include:

– Online quotes

– Product comparisons

– Order status

– Contract information

• Web site contains pricing & contact

information

• Future functionality may include:

– Online quotes

– Product comparisons

– Order status

– Contract information

Law Enforcement, General Purpose Vehicles, and BusesLaw Enforcement, General Purpose Vehicles, and Buses

• Staff Cars

• Light Trucks

• Police Cars

• Vans

• School Buses

• Staff Cars

• Light Trucks

• Police Cars

• Vans

• School Buses

EMS and Fire ApparatusEMS and Fire Apparatus

• Ambulances (Types I,II,II)

• Pumper and Tanker Fire Apparatus

• Aerials & Ladder Platforms

• Rescue, Haz-Mat, & Command

Centers

• Brush/Wildland Fire Apparatus

• Ambulances (Types I,II,II)

• Pumper and Tanker Fire Apparatus

• Aerials & Ladder Platforms

• Rescue, Haz-Mat, & Command

Centers

• Brush/Wildland Fire Apparatus

Medium and Heavy Duty Trucks,and Specialized BodiesMedium and Heavy Duty Trucks,and Specialized Bodies• Medium Duty Chassis• Heavy Duty Chassis• Refuse Collection

Bodies• Sewer Cleaners• Van Bodies• Dump Bodies, Aerial

Lifts, Cement Mixers, • Wreckers, & Water

Trucks

• Medium Duty Chassis• Heavy Duty Chassis• Refuse Collection

Bodies• Sewer Cleaners• Van Bodies• Dump Bodies, Aerial

Lifts, Cement Mixers, • Wreckers, & Water

Trucks

Communications and Emergency Equipment, and SuppliesCommunications and Emergency Equipment, and Supplies

• Radios, Base Stations & Communication Systems

• Defibrillators

• SCBA’s

• 9-1-1 Systems

• Wireless Communications Services

• Chem/Bio Detectors & EOD Robots

• Radios, Base Stations & Communication Systems

• Defibrillators

• SCBA’s

• 9-1-1 Systems

• Wireless Communications Services

• Chem/Bio Detectors & EOD Robots

Public Works and Heavy EquipmentPublic Works and Heavy Equipment

• Earth Moving Equipment

• Tractors & Mowers

• Traffic Signals Controls

• Street Maintenance Equipment

• Street Sweepers

• Equipment Trailers & Refuse Containers

• Earth Moving Equipment

• Tractors & Mowers

• Traffic Signals Controls

• Street Maintenance Equipment

• Street Sweepers

• Equipment Trailers & Refuse Containers

Security and Electronic EquipmentSecurity and Electronic Equipment

• Security Video & Access Control

Equipment

• Traffic Signals Controls

• Auxiliary Power Generators

• Sewer Video Inspection Systems

• Security Video & Access Control

Equipment

• Traffic Signals Controls

• Auxiliary Power Generators

• Sewer Video Inspection Systems

Consulting ContractsConsulting Contracts

• Insurance Consulting

• Environmental Consulting

• Homeland Security Consulting & Training

• Community Planning

• Insurance Consulting

• Environmental Consulting

• Homeland Security Consulting & Training

• Community Planning

Service ContractsService Contracts

• Lease Purchase Financing

• Electricity Aggregation

• Reverse Auction Services

• Food Products & Equipment

• Marketing and Communications

• Public Relations

• Video Conferencing

• Lease Purchase Financing

• Electricity Aggregation

• Reverse Auction Services

• Food Products & Equipment

• Marketing and Communications

• Public Relations

• Video Conferencing

HGACBuy is a proud memberHGACBuy is a proud member

HGACBuyHGACBuy• The H-GAC Cooperative Purchasing Program (HGACBuy)

recognizes purchasing as a universal profession and has adopted the H-GAC Code of Ethics as stated in the H-GAC Procurement Policy, revised edition dated January 1, 2006

• As a member in good standing of the National Institute of

Government Purchasing, (NIGP) HGACBuy recognizes that the NIGP sets the universal standards for government procurement and therefore, HGACBuy and its employees are committed to the NIGP Code of Ethics and its principals

• “Our goal is to provide to all of its members, quality products and services, by reputable vendors, through cost effective, ethical, moral and prudent procurement standards”

• The H-GAC Cooperative Purchasing Program (HGACBuy) recognizes purchasing as a universal profession and has adopted the H-GAC Code of Ethics as stated in the H-GAC Procurement Policy, revised edition dated January 1, 2006

• As a member in good standing of the National Institute of

Government Purchasing, (NIGP) HGACBuy recognizes that the NIGP sets the universal standards for government procurement and therefore, HGACBuy and its employees are committed to the NIGP Code of Ethics and its principals

• “Our goal is to provide to all of its members, quality products and services, by reputable vendors, through cost effective, ethical, moral and prudent procurement standards”

QuestionsQuestions

Contact: HGACBuy Program Staff

Phone: 800-926-0234 Fax: 713-993-4548

Experience the

Smart Purchasing Solution

Log on to: www.HGACBuy.org