In general, a cooperative is an organization made up of individuals or individual organizations that share their resources toward a common goal.

Common examples of cooperatives:

  • Credit Unions
  • Marketing cooperatives, such as the Milk or Beef industry (you’ve seen the commercials)
  • Condominiums – owners share the cost to upkeep/upgrade the common areas
  • Employee-owned businesses
  • Procurement cooperatives – these are the ones we’re interested in for this topic


There are many historical steps to today’s cooperatives, but here, we offer those directly related to purchasing cooperatives:

1752 – The Philadelphia Contributionship.  This cooperative was co-founded by Benjamin Franklin. Members agreed to make equal payments to the contributionship, which would be used to pay for losses any member would sustain through fire to his property. The first policies had a term of seven years. After the policies expired, the premium money was returned to the policyholders. (Source:  PBS.org)

1844 – Rochdale Society of Equitable Partners.  An early consumer co-operative, and one of the first to pay a patronage dividend, forming the basis for the modern co-operative movement. Although other co-operatives preceded them, the Rochdale Pioneers’ co-operative became the prototype for societies in Great Britain and beyond. The Rochdale Pioneers are most famous for designing the Rochdale Principles, a set of principles of co-operation that provide the foundation for the principles on which co-ops around the world operate to this day.

Many aspects of these objects can be seen directly in the modern-day co-operative movement. (Source: Wikipedia.org)

1850s – The Cooperator. William King (1786-1865) advocated the development of consumer cooperatives to address working class issues. This self-published magazine provided information on cooperative practice as well as theory. King emphasized small cooperatives that could be started with capital supplied by members. He stressed the use of democratic principles of governance, and the education of the public about cooperatives.

1916 – Cooperative League of the United States of  America (CLUSA).  The CLUSA was formed as a United States membership organization for cooperatives, businesses that are jointly owned and democratically controlled. Think of this as a cooperative for cooperatives. Today, this organization continues as the National Cooperative Business Association (NCBA). (Source:  Wikipedia.org)

1922 – Capper-Volstead Act.  Also known as the Co-operative Marketing Associations Act, it gave “associations” of persons producing agricultural products certain exemptions from antitrust laws. It is sometimes called the Magna Carta of cooperatives. (Source:  Wikipedia.org)

1949 – Government Services Association (GSA).  The GSA was set up to streamline the administrative work of the Federal Government. The original mission was to dispose of war surplus goods, manage and store government records, handle emergency preparedness, and stockpile strategic supplies for wartime. GSA also regulated the sale of various office supplies to federal agencies and managed some unusual operations, such as hemp plantations in South America. Today, the mission has evolved to provide stewardship of the way the government uses and provides real estate, acquisition services, and technology. This is the “daddy” of all purchasing/procurement cooperatives. (Source:  GSA)

1960s – Localized Procurement Cooperatives Develop in the Education Field.  An example of a purchasing cooperative is Harris County’s Department of Education in Texas, which has created three procurement cooperatives:

  • Choice Facility Partners, a facility services cooperative,
  • Gulf Coast Cooperative, a food cooperative primarily serving schools, and
  • Harris County Department of Education (HCDE) Purchasing Cooperative, offering more than 275 vendor contracts for commodities.

Various schools, colleges and universities, municipalities, counties, municipal utility districts and other governmental entities sign an interlocal contract with HCDE, thus becoming members that can access any of the multitude of competitively bid and legally awarded contracts available through their cooperatives. To optimize processes, these three cooperatives were combined into Choice Partners national cooperative in 2012. (Source:  Wikipedia.org)


  • FREE – Generally, being a member of a purchasing cooperative is free.
  • Save staff time in purchasing – Contracts are already competitively procured
  • Save staff time in construction, purchasing and food services
  • Save money
  • Improve efficiency
  • Extend staff time through use of these contracts
  • Compliance with local and federal procurement regulations (most purchasing cooperatives)

ERC holds multiple awarded contracts with various cooperatives. To get our latest list, CLICK HERE.
Most purchasing cooperatives manage this process similarly but check with the individual cooperatives for their specific methods.
  • A solicitation is issued, usually a Request For Proposal (RFP), Request for Quote (RFQ), or Competitive Sealed Proposal (CSP).
  • The solicitation is advertised per state statute.
  • Interested companies submit a sealed response by the due date. Responses are opened at given date and time.
  • Responses are reviewed, evaluated, and tabulated with references checked.
  • The evaluation committee makes a recommendation and places it on the next board agenda.
  • The governing board awards the contract at a scheduled board meeting.
  • Successful proposers become awarded contract holders.
Interlocal agreements are agreements between two or more governmental entities (municipalities, educational entities, etc.) that agree to share vendors that have been legally awarded contracts. They allow local government agencies to (1) stretch budget dollars, (2) work with other entities to accomplish common goals and (3) combine resources to acquire items they are unable to afford on their own.
A job order contract (JOC) is a contract for a fixed term or maximum dollar value, whichever occurs first, in which a contractor is selected based on a competitive bid to perform various separate job orders in the future, during the life of the contract. Actively used for years in the military, JOC has been a legal, well-recognized delivery method for public schools since 1995. Job Order Contracting is now defined as a method of procurement for construction, according to Texas Government Code 2269 and is no longer defined as a delivery method for construction.
These specifically pertain to JOC contracts where vendors can offer services, such as environmental, to the awarded contract. Most often, these are price sheets setting prices for these additional services for the term of the contract.
No. The competitive process by which a cooperative awards a contract covers this legal requirement. However, the entity may have their own internal requirements based on the estimated size of a project. For example: $100K and above in some entities requires three bids, even if they are all from cooperative contract holders.
Yes. However, this is not recommended. You want apples-to-apples quoting abilities. And it is important to use only one cooperative. Not all cooperatives have the same fee structure or requirements, some may be more beneficial than others. If you must get three quotes, request these from only one cooperative set of vendors.
Due diligence is an important part of the acquisition process and represents the orderly investigation of any matter pertaining to business dealings. Each cooperative offers access to the Due Diligence of each awarded contract in a different manner.
Yes. Many offer training and assistance in a variety of forms. Check with each cooperative for their offerings.