How to Reach More Buyers With Less Effort

Opinions expressed by Entrepreneur contributors are their own.

Key Takeaways

- Growing your sales through cooperative price agreements opens doors to government entities that can buy directly from you without having to do a traditional RFP process.

- This will shorten your sales cycle to government and education from years down to a few months, making it worth your time to look into becoming a cooperative price agreement partner.

I am fortunate because my business primarily serves corporate, education and government markets. Many of you may run businesses that primarily serve private-sector businesses or the consumer market. However, I believe many companies are missing potential sales opportunities in the local and state government markets by not pursuing cooperative purchasing-style agreements.

Entrepreneurs and business owners sometimes avoid the state and local government markets because they believe the bid process is too cumbersome. In previous years, and in my opinion, that was indeed a correct assumption.

However, organizations such as NASPOs ValuePoint and RFxPremier use cooperative price agreements to bring suppliers and government entities together. The process is simple, so allow me to explain.

A brief history of public procurement

While some federal agencies purchase through cooperative price agreements, the process is different and more complex. That’s why, for this article, we will focus on state and local government purchasing.

State and local governments devote thousands of man-hours and billions of dollars to purchasing goods and services. For decades, the public procurement process centered around a competitive bidding process that involved a multi-step process:

- Identify the goods or services needed

- Establish bid requirements, timelines, etc.

- Advertise the Request for Proposal (RFP) in various print and online publications

- Open and evaluate received bids (usually in a public meeting)

- Negotiate and award the contract to a qualified vendor

- Monitor contract compliance

According to recent government statistics, there are approximately 20,000 incorporated cities, towns and villages in the U.S. Combine that with 3,144 counties and 50 states (excluding the District of Columbia and U.S. Territories), and pursuing state and local contracts can seem overwhelming.

In the early years of my business, I pursued government opportunities in and around Denver, Colorado, where my company is based. Being a small business, I had neither the time, manpower, nor budget to research and bid on government work in other states.

Like most entrepreneurs, I value where I allocate my working hours. Since starting my transcription business almost 16 years ago, I have spent an inordinate amount of time and resources pursuing government contracts. It was through my original relationship with NASPO ValuePoint that I discovered the amazing benefits of cooperative price agreements for small businesses.

Cooperative price agreements explained

State and local agencies can now combine their purchasing power to secure lower prices and more favorable terms for goods and services. These agreements are known as cooperative price or cooperative purchasing agreements.

By using joint solicitations, multiple organizations can bundle their needs into a single request, the part of the process also known as “cooperative.” When states and local entities implement a cooperative purchasing method, it eliminates the need for qualified vendors to have to keep responding to dozens of time-consuming and expensive competitive bids since the procurement process is streamlined through a cooperative price agreement led by a lead agency.

Cooperative price agreements allow vendors to more easily reach multiple public entities, including educational systems that purchase large quantities of goods and services.

Benefits of cooperative price agreements

The primary benefits for government entities of cooperative agreements in the state and local markets usually include access to pre-vetted vendors, significant cost savings and a streamlined procurement process. As I stated above, the benefit for vendors also involves saving time and money pursuing the same public opportunities over and over.

David Kundid is a procurement officer for the County of Fairfax, VA. Before relocating to the East Coast, Kundid worked in the central procurement department for the state of Iowa. It was during his tenure in the Midwest that David began using cooperative purchasing-style agreements to purchase law enforcement vehicles. I met Kundid at a recent procurement conference and asked him to explain how state and local government entities can benefit from using cooperative pricing agreements rather than the conventional RFP process.

First, he explained that the typical RFP process is challenging for many government agencies, especially for small agencies with limited manpower. When procurement staff discover cooperative