Introducing the Sourcing Alliance Alternative to Pursuing Public Sector Business

As you may recall, our last digest provided you with a few important things to keep in mind when evaluating a GPO with whom to partner to pursue public sector business using a piggybackable agreement. Click here for a refresher.

Sourcing Alliance recognized that many of these key considerations presented real challenges for suppliers. This week, let’s turn our attention to the ways in which we solved for those challenges by developing a better group purchasing organization (GPO) alternative for suppliers.

The first overarching challenge is how to secure and retain a GPO contract. Frankly, the deck is stacked against you. Why? Because each of the following elements must line up precisely in your favor:

  • Timing – you have to wait for a public sector GPO to issue an RFP seeking the products and services your company sells. There are only a handful of nationwide public sector GPOs and most GPO contracts have 3-5 year terms, so there aren’t that many GPO RFP opportunities to pursue in any given year.
  • Breadth & Depth – it is unlikely that you will find a GPO whose RFP specifications include the full breadth of products and services your company sells.
  • Likelihood of Winning – given the tiny number of GPO RFP opportunities each year, you can expect most/all of your competitors who also don’t have a GPO contract to throw their hat in the ring as well, which means that your odds of winning decrease.
  • Cost & Time Commitment to Winning GPO Contract – responding to a GPO RFP is a time-consuming and expensive process, typically much more time and money than you would invest in responding to a one-off RFP published by an individual public sector entity. That’s a big investment in an RFP response for an opportunity your company is not likely to win.
  • Contract Length & Renewal Options – let’s assume you win the RFP and that you are the only company who is awarded a GPO contract. And let’s further assume your GPO contract is highly successful. You still face the likelihood that the GPO will bid you out against your competitors when your agreement expires.

Sourcing Alliance developed an alternative to the typical public sector GPO procurement process that eliminates each of the above challenges. Rather than issuing our own RFP, we convert one-off contracts awarded to suppliers by public sector entities following a public sector procurement process into piggybackable Sourcing Alliance contracts.

This approach means that you don’t have to wait for us to issue an RFP or invest in creating a proposal. It eliminates the uncertainty of whether your company will win our RFP process. And our contracts with suppliers are easily renewable – why go back out to bid in three or four or five years if our relationship is working for our members, you, and Sourcing Alliance?

In short, Sourcing Alliance’s approach solves the first overarching challenge of how to win a public sector GPO contract your company can use to sell your products and services to public sector entities nationwide.

Our next digest addresses the second overarching challenge: establishing GPO contract terms that actually work for your business.

In the meantime, if you would like to learn more about Sourcing Alliance’s approach to working with supplier partners, click here to watch our quick 3-minute overview.

Questions? We are here to help. Contact our Director of Product Development, David Robbins, at 216.478.1070 or email david.robbins@sourcingalliance.org.

 

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