Are you up to speed on cooperative agreements in SLED?

This often-overlooked tool can expedite procurement for sellers

By Benjamin Harris, SLED Market Intelligence Analyst, immixGroup

Newcomers to the state, local and education (SLED) market need a better understanding of certain contracting vehicles as they make their way through this area of procurement. A fundamental difference exists between the standard purchasing agreements used widely in the federal market and “cooperative agreements,” or cooperative purchasing contracts, that are part of the SLED sales toolbox.

We’ve addressed cooperative purchasing contracts in a previous blog post, and it’s worth taking another look at their advantages for vendors selling into the SLED market.

Cooperative agreements support purchasing power for SLED entities in multiple states. They have the flexibility to add manufacturers and resellers as needed. Cooperative agreements also allow vendors to add product and service categories under the contract umbrella.

At the recent immixGroup Government IT Sales Summit, Mike Muscara, director of member and vendor support for the National Cooperative Purchasing Alliance (NCPA), reviewed some of the advantages of cooperative purchasing agreements.

The standard purchasing process at the SLED level can take between four and 24 months to accomplish, Muscara explained. Agencies using standard purchasing agreements must conduct market research, write a solicitation, and publish and advertise the solicitation to vendors. After receiving vendor proposals, agency personnel proceed through a time-intensive process of evaluating responses, posting the intent to reward and negotiating the final contract.

By contrast, a cooperative purchasing agreement may take only days, or even hours, to get from establishing a master agreement to procurement.

Beyond the cooperative contract, Muscara noted, are a host of supplemental agreements — typically agreements for Software as a Service (SaaS), Mobility as a Service (MaaS) and other “as-a-service” arrangements. These agreements can extend to as many as five years beyond the terms of a cooperative agreement. These cooperative purchasing agreements incorporate state and local regulations and statutes, including special pricing, delivery and terms.

Understanding cooperative purchasing agreements is essential to any SLED sales strategy. Industry observers predict that growth in professional business and financial services for SLED will increase from $45.7 billion in 2022 to more than $48 billion by 2025.

Among the technological trends underpinning this growth, the capabilities of machine learning (ML) and artificial intelligence (AI) capabilities have gained the attention of the SLED marketplace. Look for lawmakers to jump on regulations for this technology to help with decision-making overall and to improve the performance of legacy systems. Cybersecurity will go hand-in-hand with these regulations based on the capabilities of this technology.

It’s important to remember that under the SLED umbrella, states, localities, and educational institutions should be treated as three different segments — with separate strategies for each subset of the overall category. By adding cooperative agreements to your sales toolkit, you’ll be better prepared for success in this rapidly growing market.

For more information about SLED trends and opportunities, as well as various SLED contracting vehicles, visit www.immixgroup.com.

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Find out more about immixGroup’s SLED contract vehicles here.