Purchasing Cooperative

A purchasing cooperative is a membership-based arrangement in which independent organizations — typically states, municipalities, school districts, public universities, or hospital systems — combine their purchasing volume and share access to a single contract that was competitively solicited once, usually by a lead member or by the cooperative itself. Any participating member can then buy against that contract directly, without running its own bid or Request for Proposal (RFP) for the same goods or services. The practice is often called cooperative purchasing, and the underlying document members rely on is a cooperative purchasing agreement or cooperative purchasing contract — a formal agreement establishing that other entities may use a contract one member (or the cooperative) already competitively awarded.

The term is frequently confused with — and sometimes used loosely alongside — group purchasing organization (GPO), a related but distinct concept. This page defines purchasing cooperative on its own terms and clarifies where the two overlap and where they diverge.

How a Purchasing Cooperative Works

The mechanism that makes a purchasing cooperative useful is simple: competitive solicitation happens once, and the resulting award is then made available to every participating member, rather than each member separately running its own procurement for the same category of goods or services.

• A lead entity (or the cooperative itself) runs the solicitation. One member — or a dedicated purchasing cooperative organization — issues the RFP or Invitation for Bid, evaluates responses, and awards a contract following standard competitive-procurement rules.
• The contract includes cooperative-use language. The solicitation and resulting contract state up front that other eligible entities may also purchase under it, usually subject to the vendor’s agreement and any state-specific piggybacking statute.
• Other members join via a membership or participation agreement. An institution typically has to register as a cooperative member (often free) before it can place orders against cooperative contracts.
• Members purchase directly from the awarded vendor at the negotiated cooperative pricing and terms, citing the cooperative contract number instead of issuing a new solicitation.

For a public university, hospital lab, or research institution, this converts what would otherwise be a multi-week (or multi-month) competitive bid into a direct purchase order — while still satisfying most institutions’ and funders’ requirement that purchases above a certain threshold be competitively procured, because the underlying contract was competed by someone.

Purchasing Cooperative vs. Group Purchasing Organization (GPO)

The confusion behind searches for ‘what is a purchasing cooperative’ almost always comes down to this comparison. Both let an institution buy off a contract it did not run its own solicitation for. The practical difference is in who runs the aggregation and what kind of members it serves:

	Purchasing cooperative	Group purchasing organization (GPO)
Typical structure	Often a public or member-governed nonprofit entity, or an informal multi-government agreement	Usually a for-profit or member-owned commercial company
Typical members	States, counties, municipalities, K-12 and higher-ed institutions, sometimes public hospitals	Hospitals, health systems, labs, and other private and public healthcare/research buyers
How it earns revenue	Often member dues or a small administrative fee built into vendor pricing	Administrative fees paid by vendors, typically capped and disclosed under the Anti-Kickback Statute’s GPO safe harbor (42 CFR §1001.952(j))
Federal grant compliance basis	2 CFR §200.318(e), which specifically encourages ‘cooperative and intergovernmental purchasing agreements’	Also permitted procurement method under 2 CFR 200.318, but framed as a commercial aggregator rather than an intergovernmental agreement
Example	A state master contract, a multi-state cooperative such as NASPO ValuePoint, or a higher-ed consortium such as E&I Cooperative Services	Vizient, Premier, or a similarly structured commercial healthcare GPO

In practice the lines blur — some organizations (E&I Cooperative Services, for example) describe themselves as a purchasing cooperative while functioning much like a GPO for their member institutions, and federal guidance itself treats cooperative/intergovernmental agreements and GPO contracts as two flavors of the same broader idea: piggybacking on someone else’s competitively awarded contract instead of running a new one. For a full breakdown of GPOs specifically, see CASRAI’s guide to group purchasing organizations for research institutions and GPO Safe Harbor under the Anti-Kickback Statute.

Cooperative Purchasing Agreements and Contracts

A cooperative purchasing agreement is the formal document — sometimes a master intergovernmental agreement, sometimes a state statute or executive-branch policy — that authorizes one public entity to use a contract that another public entity or cooperative already competitively solicited. A cooperative purchasing contract is the underlying vendor contract itself, awarded through that process, that members actually order against.

For research institutions receiving federal grant or cooperative-agreement funds, using a cooperative purchasing agreement is explicitly sanctioned procurement practice under 2 CFR §200.318(e) of the Uniform Guidance — but it comes with specific documentation expectations (verifying the underlying contract was itself competitively solicited, confirming eligibility to participate, and keeping records of the cooperative contract relied on). CASRAI covers that federal-compliance mechanic in detail in Cooperative and Intergovernmental Purchasing Agreements Under 2 CFR 200.318(e) — read that guide if you specifically need the audit-documentation requirements for using one on a federally funded project. This page is the general definition; that guide is the federal-compliance deep dive.

Examples of Purchasing Cooperatives

• NASPO ValuePoint — a cooperative purchasing organization operated on behalf of the National Association of State Procurement Officials, through which state and local governments (and often public universities) can access multi-state competitively solicited contracts.
• E&I Cooperative Services — a member-owned, not-for-profit purchasing cooperative built specifically for higher education, through which member colleges and universities — including their research and lab-operations units — can buy lab equipment, scientific supplies, and services off cooperatively awarded contracts. See CASRAI’s page on E&I Cooperative Services for membership and contract details.
• State master contracts — many states run their own statewide purchasing cooperatives that public universities and, in some states, their affiliated hospitals can join.

Frequently Asked Questions

What is a purchasing cooperative?

A purchasing cooperative is a membership arrangement that lets independent organizations share a single, competitively solicited contract instead of each running its own procurement for the same goods or services.

Is a purchasing cooperative the same as a GPO?

Not exactly. They serve the same practical purpose — letting a buyer use someone else’s competitively awarded contract — but a purchasing cooperative is typically a public or member-governed entity serving government/education/nonprofit members, while a GPO is typically a for-profit or member-owned commercial company most associated with healthcare and life-sciences purchasing. See the comparison table above.

What is a cooperative purchasing agreement?

It is the formal agreement authorizing an entity to purchase against a contract that another entity or cooperative already competitively solicited, rather than the underlying vendor contract itself.

Can a federally funded research institution use a purchasing cooperative?

Yes — 2 CFR §200.318(e) of the Uniform Guidance specifically encourages non-federal entities receiving federal grant funds to use cooperative and intergovernmental purchasing agreements, subject to documentation requirements covered in CASRAI’s dedicated guide on that section.