What Is a Cooperative Purchasing Agreement and What Are Its Benefits?

Page 7 of ICLEI's Energy Efficient Purchasing FAQ

Also called a joint purchasing agreement, a cooperative purchasing agreement is a formalized agreement between two or more entities that they will enter product purchase orders together, which increases economies of scale, reducing unit costs as well as shipping costs. Municipalities can enter into such agreements with nongovernmental entities such as a major employer, hospital, or educational institution. These kinds of facilities often have similar needs to local governments. Smaller cities and counties may not have the staff resources to dedicate to researching and verifying preferable purchasing; such governments should consider entering into cooperative agreements with other cities in their region in order to maximize staff resources and avoid repeating research.

An example of cooperative purchasing agreements is the City of Portland and Multnomah County’s Joint Sustainable Procurement Strategy, which allows these local governments to cooperatively purchase lighting, computers, printers, and other items. The strategy also enables them to enter into cooperative purchasing agreements with the state. Visit Oregon’s Department of Administrative Services – State Procurement Office for examples of cooperative purchasing contracts.

Municipalities can use other resources in their jurisdictions that benefit both parties through economies of scale. This could be a major employer, hospital, or educational institution. These kinds of facilities often have similar needs to local governments.

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