Cooperative Purchasing for Public Construction Projects

Policy

The International Institute of Building Enclosure Consultants (IIBEC) opposes the use of cooperative purchasing programs for publicly funded constructionprojects.IIBEC advocates for the use of independent design consultants with no financial interest in products specified and installed on all publicly funded construction projects.

Issue

Cooperative purchasing programs are promoted as a means to save time and money by capitalizing on participants’ combined purchasing power.  When price is the differentiator, purchasers can easily determine when they are getting a good deal.  However, when applied to complex design and construction projects the method falters on four critical points:

Circumvention of design professional’s judgement. When projects are delivered through a cooperative purchasing agreement, independent design services are routinely eliminated and relegated to the owner or another entity (contractor or material manufacturer/supplier) with a financial interest in the products specified and installed.  This process can lead toinappropriate selection ofmaterials for reasons other than best value and performance.

Lack of transparency. Given the significant sums of public money involved and available technology, much more information should be available to the public about cooperative program budgets – what they sell to whom, how much money the entity brings in, where the money goes, and how “recommended providers” are selected, along with the length of the contract.

Reduced costs do not materialize. Cooperative purchasing does make sense in some areas of procurement policy, but it has proven to be a failure frequently for design and construction projects.  Design and construction are not commodities whose pricing is easy to evaluate, like office supplies or laptops.

Competition is inhibited hurting minority, disadvantaged, and small businesses. Due to annual filing requirements andfees associated with some cooperative purchasing programs, potential contractors are forced to pay for the opportunity to possibly bid on projects, a process that has been found to negatively impact minority owned, disadvantaged and small businesses.  So, while cooperatives claim that pre-selected contractors or pre-bid products will save time, they do so at a cost.  Also, there is no way to know whether current market conditions might yield a lower price when it comes to pre-bid pricing for certain services.

IIBEC acknowledges there are different forms of cooperative purchasing programs, and this statementfocuses on those related to design and construction services in general and not a specific program.

Rationale

Every building enclosure requires the proper design, the appropriate materials, and a quality installation. Design consultants are responsible for proper design, bidding documents, code compliance, contractor pre-qualification, safety, coordination, inspection, and overall quality of enclosure.  Additionally, building enclosure consultants will ensure the final enclosure system is installed per the manufacturer’s warranty.