Cooperative Purchasing Group Celebrates 10 Years of Savings

by Marc Shapiro

The U.S. Communities Government Purchasing Alliance, marking its 10-year anniversary, has saved cities, counties, schools and nonprofit organizations across the country $735 million on $5 billion in purchases.

Through U.S. Communities, local government agencies can piggyback on competitively bid contracts, take advantage of the enormous collective purchasing power of public agencies nationwide, and leverage these savings to their own advantage.

The cumulative savings were immediate and have grown steadily since the purchasing alliance was implemented in California by the League of California Cities and California State Association of Counties with a handful of participating cities and counties in 1996.

“Since the program's inception, counties, cities, schools, colleges, special districts, boroughs, townships, villages, towns, state agencies and nonprofit organizations have achieved more than $735 million in hard dollar savings on purchases of commodities through the contracts,” said Rick Grimm, chief executive officer of the National Institute of Governmental Purchasing and chair of the U.S. Communities Board of Directors. “Total purchases have exceeded $5 billion over the 10 years of the program, including 2007 estimates.”

Grimm said U.S. Communities was born of the need for local agencies to find more efficient ways to purchase commodities and services. This was never more apparent than in 1996 when Congress decided to close Federal General Services Administration schedules to local agencies. In an effort to bring efficiencies and savings to local governments, the idea of a national buying cooperative took hold.

“While we suspected it would be successful, the savings, purchasing power and reach of the alliance has far exceeded our expectations,” Grimm said. “In 2006 alone, savings of $150 million were documented on purchases exceeding $1 billion. Today more than 20,000 public agencies are registered and participating in the program.”

U.S. Communities was founded in 1996 and is sponsored by NLC and the National Association of Counties, the U.S. Conference of Mayors, the National Institute of Governmental Purchasing and the Association of School Business Officials. Currently, 22 state municipal leagues also sponsor the U.S. Communities program.

“NLC is pleased to be a national sponsor of U.S. Communities,” said Donald J. Borut, NLC executive director. “Purchasing to meet every day needs as well as emergencies is typically one of the largest expenditures most cities and towns incur. Working with and through our network of state municipal leagues, we are able to offer a program that brings the best government pricing to big cities and small towns across the country.”

Borut was elected to a second term as vice chair of the U.S. Communities Board of Directors at its annual meeting last week.

Nancy Locke, purchasing manager, Seattle, said the city has taken full advantage of the number of offerings through U.S. Communities, including office supplies, technology solutions, janitorial supplies, maintenance and repair supplies, and playground equipment.

“In 2006 we estimate our total savings at more than $350,000,” Locke said. “In addition, the City of Seattle was able to piggyback on contracts and free our staff to work on more complicated solicitations for the city.”

Supervisor Gerry Hyland, Fairfax County, Va., a founding member of the alliance and an original member of the advisory board, said using the U.S. Communities program has, “saved Fairfax County millions of dollars in purchases on a plethora of products including office and school supplies, computer products, office furniture and industrial supplies.”

Hyland cited the office and school supply program as a prime example of savings.

“By using the existing contract under Los Angeles County, Fairfax County saved more than $1.6 million in fiscal year 2006 on these supplies,” Hyland said. “That $1.6 million a year plus significant savings from other alliance contracts allows us to fund other vital county services without having to ask for additional taxpayer assistance.”

Hyland said the soft dollar savings are as significant as the hard dollar savings. He again cited the Los Angeles County school supply contract as an example.

“In addition to hard dollar savings are process or soft savings,” Hyland said. “We no longer warehouse office and school supplies because the Los Angeles County contract requires ‘just-in-time' delivery to our work sites. We no longer have to spend money on the bidding process because Los Angeles County incurred those costs on behalf of all users of the program.”

Through contracts with such nationally recognized companies as Office Depot, Auto Zone, Home Depot, GTSI, Little Tikes, Herman Miller, Ricoh-Savin, and many others, U.S. Communities currently offers thousands of products in the categories of office supplies, furniture, computers and technology, electrical and data supplies, janitorial supplies, carpeting and flooring, parks and play equipment, public safety and homeland security solutions, and auto parts and accessories.

The U.S. Communities program is easy to use. There is no fee to participate, no minimum spending and only a simple electronic registration is required. Any city or town may register online by visiting  www.uscommunities.org and clicking on “Register to Participate.”

Electronic registration provides a public agency with access to all contract documents and pricing, all suppliers, and substantial information on program savings and program participants. It also provides an electronic copy of the master intergovernmental cooperative purchasing agreement that serves as the legal document that authorizes a participating public agency's use of each lead public agency's contract available through U.S. Communities.

Source: National League of Cities.