Procurement teams procure a range of goods and services, including technology and office supplies, and facilities and services. When different organizations procure the same or similar goods and services, procurement teams are pushed to conduct similar research. This can include comparison of suppliers, public tender processes, negotiations, and signing of contracts.
This duplication of effort can be avoided through cooperative sourcing. Organizations with the same or similar requirements can take a shared sourcing approach rather than doing it independently. This frees up procurement teams to focus on other matters.
The Cost of Repeating the Same Work
Sourcing a good or service is a complex process. Teams must identify suppliers, develop specification documents, issue procurement calls, review submissions, negotiate terms, and execute the contract.
When multiple organizations perform these steps separately for similar products, much of the work is repeated. A shared approach can consolidate some of these activities while allowing each participating organization to maintain its own purchasing needs.
Where Shared Purchasing Can Work Well
Not all procurement categories lend themselves to a collaborative approach. The best candidates are goods and/or services that are purchased routinely across multiple organizations.
Examples may include:
- Office and school supplies
- Information technology
- Facilities services
- Fleet-related products
- Maintenance services
- Professional services
The more aligned the purchasing requirements, the more easily collaborative sourcing strategies can be developed.
Procurement Involves Significant Public Spending
The potential impact of better procurement practices becomes clearer when looking at the scale of purchasing. For the OECD countries in 2023, the share of GDP accounted for by public procurement was 12.7 percent, and procurement comprised 29.9 percent of total government spending.
Large spending volumes give rise to opportunities to enhance efficiency. Even minor process refinements, when applied broadly or across many organizations/categories, can yield considerable benefits.
What Is a Cooperative Purchasing Agreement?
A cooperative purchasing agreement is an agreement that allows certain organizations to purchase goods/services under the terms of a procurement agreement that is jointly negotiated. Instead of each organization negotiating a separate agreement, participating buyers may use an existing contract with an approved supplier.
The agreement may define:
- Product or service specifications
- Pricing structures
- Contract duration
- Delivery requirements
- Supplier responsibilities
- Purchasing conditions
The participating organizations still need to follow the terms of cooperative purchasing agreement.
How It Can Reduce Procurement Work
A shared contract can reduce some of the work involved in routine purchasing. Once the agreement is in place, participating organizations need not perform the procurement process in its entirety for purchases that are within the scope of the agreement.
This can allow procurement staff to focus on other value-adding activities, including supplier performance, category management, risk management, and spending analysis, while procurement work of a routine nature is simplified. It also provides a streamlined approach to purchasing for authorized staff.
Technology can make this analysis easier. According to Deloitte’s 2025 Global Chief Procurement Officer Survey, approximately 20% of a procurement leader’s budget was allocated to procurement technology. The survey was based on input from more than 250 procurement leaders in over 40 countries.
Conclusion
A centralized procurement system eliminates redundancy in sourcing efforts across organizations and optimally utilizes purchasing resources across all companies. This method works best when several companies have similar needs and can harmonize contracts. Organizations can optimize the purchasing function by defining spending, responsibilities, and supplier relationships. The resulting purchasing process will be simpler and more efficient.
