All Purchasing Cooperatives Are Not the Same

For many years, cooperative purchasing options in Arizona were very limited. The success of the few established statewide cooperative purchasing programs led to the establishment of additional Arizona-based purchasing cooperatives and consortiums. The latest trend is various forms of national purchasing cooperatives.

As one of the long-time established Arizona purchasing cooperatives, Mohave has watched this phenomenon with interest. Additional cooperative purchasing programs present opportunity for Arizona government agencies. However, they also require careful consideration and review prior to their use as an appropriate purchasing solution.

The decision to use cooperative purchasing rests solely with the buying entity. The same is true when determining which cooperative contract to use. As the field broadens, I thought I would provide some factual information about Mohave and its cooperative purchasing program.

In 1988, Mohave entered the cooperative purchasing arena to provide a viable solution to Arizona school district requirements for Apple Computer products. We expanded our program because we were asked to provide similar solutions for other government entities and a broad range of products and services.

Mohave exists solely to administer a quality cooperative purchasing program for Arizona government agencies. We have no other business or service activities.

Mohave procurement solicitations and contracts are based solely on the Arizona State Procurement Code and the Arizona State Board of Education School District Procurement Rules. Because we contract solely for Arizona entities, we follow Arizona codes and regulations.

Our contracts result from member requests. We do not contract for our needs, and then make the contract available for piggybacking.

Mohave is a funded through a one-percent administrative fee. We do not receive budget allocations from our members. We enter each year with no guaranteed funding. Because of this, we must generate enough administrative fee to cover the entire cost of operations.

Mohave states openly that members pay the administrative fee. For most contracts, the fee is included in the contract price and is remitted to Mohave by the vendor.

Because the administrative fee is included in contract prices, Mohave could state that vendors pay the fee. However, we believe such statements to be nothing more than marketing programs. In reality, the buyer always pays the cost of doing business. Administrative fees are a cost of doing business. Therefore, the buyer pays the fees, even when they are included in contract prices.

Mohave’s administrative fee pays for our facilities, equipment and operations. It is never used to pay rebates to partners or lead agencies.

We respect each member’s desire and responsibility to make purchasing decisions that are in the agency’s best interests. We recognize that other cooperative contracts will be reviewed and used. However, with the rapid growth in purchasing cooperatives, we thought it important to remind people that all purchasing cooperative are not the same. The rest is up to you.

Thank you for supporting Mohave’s cooperative purchasing program for the past twenty years. We look forward to providing you with a viable cooperative purchasing program for many years to come.

3/10/08, JTP

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