Duplicated: Roof Connections Podcast: Episode 10 – Cooperative Purchasing

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RC Ep 10

David H: [00:00:00] Have you heard about cooperative purchasing? In today’s episode, we’re going to break down what cooperative purchasing actually is, who’s eligible to utilize it, and discuss the benefits of using cooperative purchasing.

[00:00:12] Hello, welcome to another episode of Roof Connections Podcast, a show dedicated to different aspects and topics related to facility maintenance. My name is David Huval. For the past eight years, I’ve worked on the marketing side of the roofing industry, particularly in national commercial companies like RoofConnect, the largest national commercial roofing services provider in America.

[00:00:33] Today I’m joined by Tammy Rimes, Executive Director for the National Cooperative Procurement Partners to discuss cooperative purchasing, from what it is to who qualifies for public contracts, as well as the benefits associated with it. I’d like to introduce my co-host for today’s episode. If you listened or watched our latest episode, you’ll remember Ken Beck, the Director of Business Development for RoofConnect, Tammy, Ken, thanks for joining me today.

[00:01:01] I’ll start with you, Tammy. Let’s discuss your background. People may not know who you are or who the National Cooperative Procurement Partners or NCPP is.  So, tell us a little bit about the NCPP and about your background.

[00:01:18] Tammy R: [00:01:18] Sure. Well, before NCPP just to give everybody a little bit of a background on me, I was 26 years with the city of San Diego and the last five as the purchasing agent. The city, as many of you may not know is the ninth, largest city in the nation, and I was over the purchase of commodity services and all construction for the city.

[00:01:38] Since I retired, I’ve now become executive director for the National Cooperative Procurement Partners, also known as NCPP, which is North America’s premier association for cooperative procurement. We have members who are cooperative organizations, strategic suppliers, like RoofConnect, who hold cooperative contracts, and just as importantly, public procurement and government employees who use cooperative contracts.

[00:02:04] Ken B: [00:02:04] I’m curious. Can I, can I jump in and ask a question? Just curious, Tammy, when you left the city of San Diego, I know you use cooperative contracts there quite a bit, so what convinced you to stay in that vein and work with NCPP?

[00:02:23] Tammy R: [00:02:23] Sure. So, one of the key benefits for a cooperative contract for any organization looking at them is that it’s an already solicited contract. So many of us who look at government purchasing, number one complaint, it’s so slow. Everybody gets frustrated. The suppliers get frustrated. The customer departments like facilities and public works gets frustrated, even purchasing, we get frustrated. It’s just a long cumbersome process, but it’s in place to ensure transparency, open competition, and just to make sure all the rules are followed. The key benefit cooperatives offer, is that that process, it’s already been done for you. So that awarded contract is ready to go. You can, and the term is piggyback on that contract and use it for the services that you need.

[00:03:14] One of the key reasons that purchasing teams use cooperatives is to collapse the timeframe for that solicitation process. The other key benefit is that, as big as my city was and right up the street is the city of Los Angeles, they also use a lot of cooperative contracts because we can leverage our spend. So, I’ll take my spend, along with whoever else is using that contract, and by leveraging that, we drive the prices down for everyone. I mean, that’s why many of you, in your personal life, you go to Costco, you go to Sam’s club because you go to these big places to leverage the pricing. So, now you can do it for government purchasing as well.

[00:03:54] Ken B: [00:03:54] Okay, fantastic, thank you.

[00:03:57] Tammy R: [00:03:57] You’re welcome.

[00:03:58] David H: [00:03:58] Yeah, that’s great. So, to step back a little bit, who all is eligible for cooperative purchasing? Who’s eligible to participate in public bidding?

[00:04:09] Tammy R: [00:04:09] Yeah. Most public agencies can, there are some, a few out there that cannot, but it’s usually legislatively mandated they can. On the whole, most cities, counties, townships, agencies, such as airports, transportation districts, states, as well as universities and colleges all have the capability to use cooperative contracts. Now that doesn’t mean that they could just piggyback on a contract and go on down the street, there’s still some due diligence that’s needed. So NCPP, to help in that due diligence, we actually created a roadmap to a cooperative procurement strategy. It’s an easy to pull down roadmap off our website, and that’s where we went out to public professionals across the nation and said, okay, so you’re thinking about using a cooperative, do you have a checklist? What are the questions you ask about the cooperative? About the contract? About the supplier? There’s still some due diligence needed, but once that part is done, then you can piggyback and start using it.

[00:05:11] What’s really interesting, as far as a new trend, and this actually relates directly to RoofConnect, is in the past, a lot of procurement teams were very comfortable using cooperatives for well-defined commodities. Let’s think office supplies, furniture, tires, that sort of thing. But in the last few years, the cooperative industry has responded to procurement’s need for consulting services, for construction services, for job order contracting; so, it is kind of a new area for some to look at, say roofing, by using a cooperative contract, but my gosh, it is the way to go.

[00:05:48] So I’ll use myself as an example. Within the city of San Diego, we have multiple buildings across 220 square miles, which makes up the city of San Diego. And on any given day, although the city doesn’t get that much rain, one of them is going to call me and says they have a leaky roof.

[00:06:04] Well, they’re not going to be very excited to hear me say, well, we can put out a bid and maybe in six months we can have that roof, either refurbished or repatched or you know, completely redone. And they just look at me, six months? Are you kidding? It’s leaking now! So, where it really comes to the advantage, if you have multiple rec centers, if you’re a school system, you can’t have kids moved around that leaky bucket, or worse, if it snow. This is a chance where you could actually have an on-call contract ready to go and get roofing services out there immediately. So, to me, that’s a true benefit of having cooperative contracting for construction services such as roofing.

[00:06:49] Ken B: [00:06:49] Okay. Are there any specific requirements to use a cooperative contract that you haven’t touched on, that have to be met to use a cooperative?

[00:07:00]Tammy R: [00:07:00] A lot of times within the contract language itself, a lot of these are awarded at a manufacturer level or they’re awarded at a national level. But a lot of times a local municipality has to have their own terms and conditions or their own indemnification language put in the contract, many cooperatives allow this. It’s still a discussion to have with the supplier, because the supplier has to also agree to that, but on the whole, most suppliers, they’re not going to require me to have indemnification language, say for Minnesota, when I’m in California, they’ll allow me to, to add that.

[00:07:37] So that’s one extra step that sometimes you have to do. And specifically, in construction, there may be a few extra steps. So, for instance, there’s public contracting code, you have to make sure and most of them comply with no problem, but there’s still that due diligence to make sure a lot of local municipalities are interested in using local contractors. So that may be an extra step or an extra conversation to have. Who will be the contractors within my area that are actually doing the work? And if minority and women owned business is a social goal that your organization is trying to increase the numbers, again, that’s an additional conversation, maybe you have a choice among the contractors and you can use that, leverage that. So though there’s a lot of nuances just depending on the specific municipality and what their own goals are.

[00:08:29] Ken B: [00:08:29] That makes total sense.  I know we have had that question asked and what we’re able to do then as the, the national contractor who holds the prime contract, if they want somebody local to do it, we’ll actually vet them to make sure that they meet the standards that are required under the contract, and, and then they’ve got the best of both worlds. They’ve got a pre-bid contract, and they’ve got a local contractor. So with that, can you kind of go through the process of how a cooperative RFQ is bid out initially?

[00:09:10] Tammy R: [00:09:10] Initially when a need arises in a government, they have a decision tree. So, the first decision, are we going to go out to bid? Are we going to look and see if somebody out there, it could be a cooperative contract, could be the state, could be my neighbor down the street, the County of San Diego, maybe they have a contract? I’m going to do the research to see who might have a contract that most specifically meets my needs.

[00:09:34]I do like the cooperative angle only because the way they’ve been bid and awarded, they have such open language in there, that it’s easy for me to accommodate my needs within that. If I’m trying to piggyback over another agency’s contract, sometimes they have it nailed down specification wise, so tight that there’s no way I can piggyback, I’d have to go out to bid. So that’s the first step. Once you do that research, say I found the cooperative contract, I’m interested, now I’m going to pick up the phone and call the cooperative. What I want to do is, I want to see the initial solicitation, their RFP, they put out on the street.

[00:10:09] I want to see the awarded contract. I may even want to see the responses, the references and all that due diligence. So that if I go before my city council and say, this is what we need to do. If they ask me any questions, I’m ready with the answer. Then the next step is to talk to the actual awarded supplier and that’s where I’m going to give you my needs, nuances, timing, all of those social goals I just mentioned and see if we can work those in, within the contract. And then of course, we’ve got to involve the attorney. So now I’m bringing my attorney involved to review everything and that really slows things down, but that’s what we’re about. And it’s helpful, I will tell you, if you can help educate your assigned attorney about cooperative purchasing.

[00:10:55] It’s not something that they automatically know about, even though it’s a concept that’s been approved by the American bar association. But still not every attorney knows all the nuances of procurement. So that’s also an education step. And then finally, to the end department users, so for instance, roofing is not something purchasing gets involved in. It’s going to be my facilities director, my public works director. Those folks are actually handling the facilities. So that conversation and that coordination between those two departments also need to happen.

[00:11:28] So here’s one roadblock that sometimes happens. Let’s say the public works director really wants to use your company and they come to me purchasing and say, okay, this is who I want to hire, and I want them to do this, this and this. I’m like, whoa, whoa, wait a minute, there has to be an open competition. I’m purchasing, I have to make sure that we stay within the laws. All they have to tell me is they have a cooperative contract and now you’ve made me, purchasing, feel a little bit better.

[00:11:56] Now I’m going to review that cooperative contract. So, part of the customer departments responsibility or help in this is, to make sure they share with purchasing that there is a cooperative contract we can piggyback on. Not only do I want this vendor and supplier, and this is what I want them to do, but I’ve also got a contract vehicle we can piggyback on and start work. So, it’s a lot of nuances there back and forth between all those different parties, but relatively short timeframe. It can all happen within one to two weeks and be done versus a six-month bid an award process.

[00:12:32] Ken B: [00:12:32] Yeah, it is amazing, even with the lawyers getting involved. It can happen that fast because all these contracts have been competitively bid nationally, most of them, the ones that we’re involved in, have been.

[00:12:46]Tammy R: [00:12:46] I’ll share another benefit, for me, and you kind of touched on it, because a cooperative contract has been awarded by a cooperative to a national company, and now you have, in this case, helped me select a local contractor who’s working on my project. Let’s say something happens. There’s a little bit of a hiccup or a mess up or misunderstanding. I can still have that conversation with that onsite contractor, but it’s nice to know I can call RoofConnect for help as well. I can call the co-op for help. And now I’ve got a little bit more leverage in this relationship, because things go wrong all the time in construction, and I feel like I’ve got more people that have my back in this situation, with an awarded contract.

[00:13:29] The second part of this is that cooperative contracts are typically awarded to world-class suppliers. You guys have good track records. You have the capability, the feasibility to serve large government customers. And in this case, I would be asking you, so who else uses you through this cooperative contract? And this is the time to name drop, because I will actually pick up the phone and call my peers. Say you mentioned city of Dallas or city of Cincinnati. I’m going to talk to them and see how the service has been. To me, that makes me feel safe. Procurement always wants to feel safe. We don’t want to be out there with our necks on the line. We want to make sure this was a good decision. So that’s the other advantages I feel like co-op s bring, that a regular construction bid and award contract doesn’t bring.

[00:14:18] Ken B: [00:14:18] Yeah, we have found our best, potential client, is somebody that has open bid a contract, just prior, and they realize the foibles that can happen through that open bid process. So, I apologize, but David, this has been a great conversation. I want to give Tammy a chance though, if there’s anything that you’d like to say about NCPP that might help our clients or help other people with cooperatives? I know our competitors look at our podcast, we do track it and we’re happy to help.

[00:14:59] David H: [00:14:59] It’s all about educating the industry and our customers.

[00:15:01]Tammy R: [00:15:01] I’m a big believer of that, and that’s one of the primary goals of NCPP. I’m a big believer in the John F. Kennedy quote, a rising tide, all boats will float. So anytime you can get education out there, it’s going to help everybody. So a couple of trends I see. One is the use of cooperatives is growing exponentially, through COVID, through everyone having to work from home, not everyone had the same resources available to them, so they couldn’t do the traditional bid or put it out on the street. They couldn’t do site walks, as they had done in the past for construction crews to come through. So, a lot of municipalities started moving toward co-op some of them for the first time and some of them increasing their spend under co-op. So that’s a good thing. I’m not saying that co-ops are the answer to everything.

[00:15:51] I was a former purchasing director. Sometimes you have to go out to bid for political reasons or otherwise, but as a goal, you should look at your strategic spend across all you spend, and a big percentage of that should go to co-ops. If it’s something that’s been done before by another entity, why the heck are you spending your time going out to bid, piggyback and move on and work on more strategic stuff. That’s just my philosophy.

[00:16:16] The second trend that I see is that a lot of, I mentioned it earlier, while commodities are well-accepted under co-ops construction is kind of a new area, but I find it growing as more people get more comfortable, as people research it and see that it complies with all public laws that you need to under the construction, prevailing wage, all of that sort of thing that construction folks have to pay attention to. So, I’m encouraging people to try it for construction. And here’s the thing, if you’re not sure, try it as a pilot, I always loved the word pilot because it means I could go try something and I’d get everybody’s okay to do that, and then if it went well, we just keep on doing it. Forget the pilot. We’re just doing this from now on.

[00:17:01] So I encourage municipalities, that if you’ve never tried construction using a co-op, do it. It’s highly successful and it’s a great way to take care of the maintenance and repairs, the day in and day out facilities type of work. When you’re building a brand-new police station from scratch, that’s probably the time you go out to bid, that’s a different kind of project, but for your repairs, this is the way to go.

[00:17:24] David H: [00:17:24] Well, Tammy, we’ve talked a lot about the benefits of using cooperative purchasing. Are there any challenges that you haven’t covered yet that people might need to be aware about?

[00:17:35] Tammy R: [00:17:35] Yeah. Primary is lack of education. It’s not so much procurement. Procurement folks know about co-ops, it’s when you get out to the attorney, when you get out to the public works director, a lot of times they don’t even know, or they they’re so used to doing an old school way of putting a bid out on the street. Even when they have something new and shiny like this, that actually works, they’re often not so sure are we really allowed to do this? So, education’s a big part of that and that’s where NCPP comes in. A big part of our mission is education, and we create a lot of what I call non-denominational materials, meaning, it doesn’t point you to any one vendor, it doesn’t point you to any one co-op, but it really gives you the lay of the land. We also worked with Harvard university and they put out a white paper that actually advocates for the use of cooperative purchasing as well at an academic level. So, we’ve got it both at the operational level and the academic level, as well as the legal. I mentioned the ADA approves the use of co-op, so it is allowed, but education’s the main thing, is getting it out there, getting the word out.

[00:18:38] David H: [00:18:38] Ken, did you have any other follow-up questions? 

[00:18:41] Ken B: [00:18:41] No, I think Tammy and I had a great conversation.

[00:18:44] David H: [00:18:44] I had one more question Tammy. For anybody that ends up listening to this podcast, that’s say they’re not a member of the NCPP, how can they get involved if they’re looking to further educate themselves on cooperative purchasing? What about contractors that might want to get into working cooperative contracts?

[00:19:02] Tammy R: [00:19:02] Well, it’s a great segue, thank you. First of all, you can visit the ncppassociation.org website, and you can see all our membership benefits, but we have gotten more and more questions from suppliers on how to sell to a government. How do I even get a cooperative contract?  Once I’m in the meeting, what do I say? What don’t I say?

[00:19:21] So NCPP is working with Oregon state university, and this month starting March 31st, we’re rolling out off four -part series. It’s taught by all former, or I like to say, recovering purchasing agents. We’re going to give the true lay of the land. Like, when you get in the door, do this, don’t say this, don’t do that, but we’re also going to talk about the landscape of cooperative purchasing and how you might land the cooperative contract in the future. So, it’s a great series that’s going to be available on the website, or if you just want the more generic, educational materials, they’re all free, you can just pull them down off the website.

[00:19:57] David H: [00:19:57] That’s great, Tammy. Thank you. I was going to ask Ken, is there anything you’d like to share, for our customers or contractors, that you’d like to say for RoofConnect?

[00:20:05] No, I think RoofConnect and PaveConnect, we do about 20% of the total volume of the company, through our cooperative purchasing program. And it’s kind of funny, we always promote RoofConnect but it’s so amazing, when I walk out of an office sometimes and just simply mention to somebody, well, you know, if there’s ever anything we can do to help you with your roofing or paving… and suddenly, they’re interested. My gosh, you have a nationally bid cooperative paving contract? Yes, we do. So, anything at all that we can do to help people with either one of those. We do believe in education. That’s why we do the podcast. So, reach out. We’ll be happy to help.

[00:20:49] Alright. That’s great.

[00:20:50] Tammy R: [00:20:50] Well I just learned something too, you do paving, that’s awesome!

[00:20:57] David H: [00:20:57] Yeah, we’ve had a lot of customers who struggle finding quality paving contractors.

[00:21:03] Tammy R: [00:21:03] Oh yeah. To redo a parking lot or redo something like that quickly, like before school starts, that’s awesome.

[00:21:10] David H: [00:21:10] Well, that’s all the time we have for today’s podcast. I would like to thank my guest, Tammy and cohost, Ken, for joining me on today’s podcast.

[00:21:18] If you’d like more information about the national cooperative procurement partners you can visit their website at ncppassociation.org. If you’d like more information on RoofConnect and how they can help you in the construction arena. You can go to roofconnect.com, they have a tab on there for purchasing contracts, just check that out. If you enjoyed today’s episode, be sure to check out our other episodes. This is our second season. We’ve got nine or 10 episodes now. You can subscribe to our podcast on iTunes, on Spotify, SoundCloud, just about anywhere you download your podcast. That’s going to be all for today.

[00:21:55] Again, my name is David Huval. Thanks for joining us!

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