At its most fundamental level, cooperative practice takes two forms: “joint solicitation” and “piggybacking”.
Joint solicitation is the intentional coming together of two or more agencies to aggregate their individual product and service needs (a.k.a. “purchasing volume”) into a single solicitation effort. Each participant agency is bound to the resulting contract resulting from the singular effort.
Prospective suppliers have a clear understanding of the volume and service level requirements necessary to support the committed agencies. Joint solicitation is a forward-looking, collaborative approach to cooperative practice that can provide clearly defined requirements and volumes. In general, joint solicitations occur with a relatively small number of agencies putting forward a greater – though shared – level of effort early in the procurement process to improve their negotiating position.
Piggybacking is the use of a contract by another agency that was not, itself, a party to the original solicitation and contract award. Agencies choosing to piggyback on another agency’s contract are bound by the terms, conditions and pricing provided for by the contract.
In contrast to a contract established through a joint solicitation process, when an agency creates a contract that allows for piggyback use the awarded supplier(s) do not know what the actual purchasing volume will be over the life of the contract and so may not be in a position to offer the most aggressive pricing. As contracts that allow for piggybacking grow in their utilization over time, the contracting agency may improve its negotiating position based on historical volumes during future procurement efforts. Thus, piggyback approach to cooperative procurement is a more retrospective approach to cooperative procurement as it is only after greater levels of contract use can be demonstrated that improved pricing and terms can be realized.
The principle of piggybacking is fundamental to the growth in number of “cooperative programs” and the use of the contracts they promote.
REFERENCE: Global Best Practices - Use of Cooperative Contracts for Public Procurement