Using Cooperative Purchasing for Capital Projects

March 2, 2021


Robert Warholic, Partner, The Smith Group
T:  607.760.2350

School construction is always part of the job that is exciting but is also very stressful.  Communities and district stakeholders are trusting that their capital expectations will be met as they support capital referendums.  However, ensuring a successful capital project is so much more than just designing, bidding, and building.

District leaders are not typically construction experts.  Educators, develop programming, fiscally support it, and collaborate with stakeholders to ensure students are placed first and foremost every single day.  So, they do our best to surround themselves with the best possible team (architects, bond advisors, and construction managers), to give themselves the absolute best opportunity to complete a successful project.

A phase of school construction that is overlooked is procurement.  As leaders they know their options to procure most items and most assume the only way to do capital projects is to bid them.  However, that is not the case.  In the past few years, the national movement for construction procurement and has become more prevalent in New York State is utilizing cooperative purchasing agreements and/or piggybacking agreements to procure school capital projects.  Its an idea that many professionals claim to understand, but very few seem to realize the benefits. 

One of the many advantages comes from understanding what a construction bid is really composed of.  Contractors are competing with one another to “win” the bid, not to necessarily do your job.  The problem with this is the “bid” is really about winning.  The challenge that brings to the district is the price you receive is a direct response to the drawings and the competition not your project.  It seems crazy that leaders are forced to place trust in a contractor that just looked at a drawing, priced it and never was part of the team.  The cooperative process allows you to take a pre-existing procured contract (similar to a state contract) and price your specific job.  You bring the contractor on to the team as part of the process, not as a result of a bid.

In educational terms, there is not district that would hire a teacher because they were the cheapest or low bidder.  Rather, they go through a specific hiring process that ensures the candidates know the expectations, are a good fit, and most importantly share the desire to ensure all students will be successful.  So if given the same option to procure construction why do districts risk a low bidder “winning” and “hope” they get a good number and “hope” for a good outcome?  “Hope” is never a strategy, but rather something that is often a result of no choice. 

It is certainly fuel for thought, but also understand it is not always understood in NY.  If you are currently frustrated or maybe haven’t really thought much about construction process, I would encourage you to call The Smith Group.  In the past two years this process has become the go to process for many districts in NY.  We would love to sit down and talk about the process and let you decide if it works.