HD6 - Use of Cooperative Procurement by Virginia School Divisions

Executive Summary:
House Joint Resolution 60 (2010) directed JLARC to examine potential cost savings through cooperative procurement by local school divisions and to determine the appropriateness of requiring divisions to contract collectively in certain areas of procurement.

JLARC staff found that cooperative purchasing methods were used for approximately 40 percent of major recurring purchase expenditures in FY 2009. Although cooperative procurements resulted in better value for many school divisions, some divisions were able to obtain lower prices through independent competitive purchases. However, greater use of cooperative procurement would likely lead to additional savings by achieving economies of scale—particularly among smaller divisions.

Because no one purchasing method consistently offers the lowest price or best value, a State requirement that any particular good or service be purchased through cooperative means would not be appropriate. However, the State could promote greater procurement efficiency by implementing a statewide health insurance plan for all school division employees, creating incentives for school divisions to jointly purchase health insurance, increasing awareness of cooperative opportunities, or by sharing the services of a regional full-time procurement officer.