In these tough economic times, the procurement function within government has an opportunity to reposition itself as strategic, not just an administrative cost center. The National Association of State Procurement Officials (“NASPO”) has released a Research Brief about how central procurement organizations can capitalize on this strategic position entitled “Administrative Fees: Creative Funding for Central Procurement in Difficult Economic Times.”
This brief provides useful information about how 26 states have implemented an administrative fee to either partially or fully self-fund the procurement function. In most cases, fees are charged for procurements associated with term contracts. These fees include:
- Transaction fees charged to participating vendors. In some cases, these fees may be assessed for all purchases, while others charge only for purchases made by specific entities (such as purchases made through by partners in a cooperative purchasing network).
- Transaction fees charged to agencies using established contracts. These fees reflect the central procurement function’s role as a “shared service center.”
- Subscription/participation fees, charged on an annual basis for such things as vendor registration.
To access the NASPO Research Brief and learn more about states’ experiences, click here.
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