By: Cooperative Purchasing Newsletter
When calculating the Total Cost of Procurement (TCP), it is notenough to look at the price of the product or service alone. TCPis composed of the time, effort, and resources that go into the finaldelivery of an item, including:
- Specification research
- Vendor interviews
- Creation of bid & RFP documents
- Advertisement of procurements
- Pre-bid conferences
- Bid openings
- Bid & RFP evaluations
- Coordination of evaluation committees
- Creation of award recommendations
- Action taken by governing body
- Protection against legal challenges
- Establishment of contract documents
- Issuance and/or negotiation of contracts
- Administration of contracts
Consider the hard dollar costs of such activities as advertising aswell as the soft dollar costs associated with time spent by purchasingand legal staff in the procurement process. Once all thesefactors are added, the TCP can range from under $1,000 for asimple commodity purchase to many thousands of dollars formore complex RFPs. The time involved in making an award fora more complicated procurement can easily exceed 12 months.
Cooperative purchasing makes this process much more efficientby relying on the procurement steps that HGACBuy has alreadycompleted. In most cases, purchasing through HGACBuyinvolves working directly with a contractor, receiving a quote, andissuing a purchase order. By using HGACBuy, you are workingdirectly with another unit of local government since HGACBuy isa political subdivision. By leveraging thousands of local governmentsnationwide, the savings on the product or service adds upas well. So to meet the procurement needs of your jurisdiction,cooperative purchasing through HGACBuy not only makes sense;it saves cents, too!