New York Gov. Andrew Cuomo signed legislation in August designed to help schools and other government institutions save money by taking advantage of cooperative purchasing networks. The law makes New York the final U.S. state to allow for cooperative purchasing and could provide much needed relief for schools looking to cut costs.
The legislation allows municipalities, counties and districts to “piggyback” on existing contracts between vendors and government institutions. Replicating existing contracts cuts out red tape and minimizes administrative costs. In the end, cooperative purchasing benefits both vendors and procurers by expanding markets and consolidating orders.
“Cooperative purchasing has been proven to drive down costs and help stretch shrinking budgets through tough times,” says Trey Moses, director of operations and business development at The Cooperative Purchasing Network (TCPN), a leading cooperative that partners with over 30,000 government entities.
It benefits school districts in particular since districts across the country tend to place similar procurement orders. “Over half of our purchasing entities are schools,” explains Moses. “Schools can leverage their purchasing power to get significant discounts on offices supplies, technology, and routine maintenance contracts.”
The National Association of Counties estimates that cooperative purchasing agreements can save schools an average of 10 percent in contracting costs. In New York, where the legislature has committed to cut nearly $1 billion in administrative and purchasing costs through 2013, the introduction of cooperative purchasing could help close the gap.
New York school procurement officials are welcoming the change in policy. “It’s about time; other states have been taking advantage of cooperative networks for years,” says Gary Smith, director of procurement and supply for the Rochester City School District.
The district serves over 32,000 students, and Smith is responsible for 12,000 procurement orders annually totaling more than $170 million. “I’ve been in favor of cooperative purchasing for years and thanks to the new legislation, I can now leverage taxpayer dollars more efficiently,” says Smith.