Cooperative Purchasing: State Procurement Offices Prioritize Sustainability During Acquisitions

The Minnesota Office of State Procurement is a founding member of the Sustainable Purchasing Leadership Council. The procurement office maintains a high degree of integration with the SPLC and the National Association of State Procurement Officials to adopt sustainable practices and incorporate them into the everyday work of the Office of Enterprise Sustainability.

NASPO works across state procurement offices to support sustainability efforts through several mechanisms, and one significant such mechanism is cooperative purchasing.

Does Cooperative Purchasing Support Government IT Sustainability?

Solomon Kingston, deputy chief cooperative procurement officer with NASPO ValuePoint, worked for the State of Utah Division of Purchasing for almost seven years, getting his start as a contract analyst and procurement manager.

“As we conduct a procurement, some states absolutely mandate that ESG-type factors are included in the overall procurement,” Kingston says. “They look at different factors on environmental impact, sustainability and the overall impact that any one procurement has on the environment. Other states take a 180-degree approach and, explicitly by statute or policy, restrict any type of ESG factors from being included in the procurement.”

NASPO encourages states to consider cooperative purchasing, such as through its ValuePoint agreements for assets, including IT assets. While criteria on environmental impact may not factor into an overall procurement, NASPO helps ease the environmental impact of purchases through tactics such as placing minimum orders.

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“If you look at the minimum order that states place under a NASPO ValuePoint contract, it encourages and pushes our states and the buyers of our contracts to aggregate their purchases to gain volume discounts, leading to better pricing extended to the states, while also taking into account some of the environmental impact of the underlying purchase,” Kingston says.

Cooperative contracting, prices and balancing ESG considerations are elements of an ongoing conversation that NASPO has with state governments.

How Can Contracting Vehicles Support State and Local ESG Goals?

Johannes Schnitzer, managing counsel for McKinsey’s global public sector team, says the public sector can help to address challenges posed by climate change with sustainable public procurement. Traditional government procurement metrics have traditionally focused on the initial purchase price, which sometimes do not fully consider the lifecycle costs of technology acquisitions, he notes in an article on McKinsey’s website.

“With respect to environmentally sustainable public procurement, governments can be encouraged to take a proactive role in setting ambitious sustainability targets and ensuring that their procurement policies align with these goals (for example, by making lifecycle costs mandatory for certain purchases),” Schnitzer writes.

Cooperative purchasing contracts can help control those lifecycle costs for technology procurements, Kingston says. Through NASPO ValuePoint, the association negotiates prices with suppliers while also standardizing baseline requirements that a state government may have for a laptop, for example.

“We are definitely also seeing less waste,” he says.

DISCOVER: eProcurement can drive efficiency and expansion.

Depending on their overall goals, state governments may balance cooperative purchasing with buying from local suppliers, which also can support sustainability and environmentally friendly practices while controlling costs, Kingston says. NASPO empowers local suppliers to participate in its ValuePoint cooperative program.

“If the underlying goal is to increase local participation in state contracts, we’ve been looking at what is the current threshold or where are the current purchases being driven, setting that benchmark, and then measuring from there,” he says.

“NASPO has been very mindful that buying local at its core does not inherently mean you’re paying more or less for an item. We’re looking not just at the dollar amount but also the full lifecycle cost of that item from initial acquisition to use, maintenance, and the ultimate disposal of that computer equipment,” Kingston adds.

SIMPLIFY: Lean on custom IT procurement services for easier purchasing.

How Do State Procurement Offices Make Sustainable IT Purchases?

Kingston says Utah ultimately could bring costs down while also complying with all state laws. And Utah state law restricts consideration of ESG factors in state government procurement, including IT procurement.

“Working through NASPO as a cooperative procurement agency, we were able to balance different ESG factors in our overall procurements but stay true and comply with our statute, which says we’re not able to use ESG as an evaluation or selection criteria,” Kingston says.

By contrast, Minnesota actively seeks ways to encourage sustainable procurement. Grubbs says his state was an early adopter of sustainable practices. A few everyday practices include requiring all government computers to carry an environmentally friendly EPEAT Gold Certification. The state also recently extended its PC and laptop deployment cycle to five years to stretch its computer refresh timelines to support sustainability.

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“We also asked vendors to ship us laptops in pallets instead of individual boxes. I think that’s pretty common now in enterprise deployment, but that’s something we initially had to request specifically,” Grubbs says.

The Minnesota Office of Enterprise Sustainability recently assessed some state government facilities for energy use to identify low-cost or no-cost opportunities to reduce energy consumption and introduce environmentally friendly measures to buildings that house onsite IT assets such as servers. The state will then follow up to “retro-commission” government buildings in line with the recommendations, Grubbs says.

“It’s often in managing the HVAC system,” he says.

As StateTech has previously reported, ensuring on-premises IT infrastructure has appropriate power and cooling has been a traditional way that state and local governments support environmental sustainability goals. Kingston agrees that this is a strong tactic for state governments’ environmental sustainability solutions.

“That is the most common area of focus as they look at the environmental sustainability of any one of their data centers, or even their work environments: the energy consumption that is being consumed day in and day out,” he says.

Finally, Minnesota follows sustainability guidelines in recycling its IT equipment, Grubbs says. State agencies donate or sell assets “of any value” through the Minnesota surplus services division.

CONSERVE: Technology can support agencies striving for sustainability

Will Sustainable IT Contacting Increase in the Future?

Acquisitions research firm Deltek recently analyzed its state and local government contract data for a four-year period, 2019-2022, and found increased spending on environmental initiatives supporting sustainable procurement.

Brent Mital, senior research analyst for Deltek, writes in a company blog post, “The continued effects of climate change are causing state, local and education (SLED) governments to seek more solutions to mitigate the impact of their contributions. States are investigating the best ways to do this to better utilize existing resources and assets while also converting to more green or sustainable ways of producing energy.”

Overall environmental initiatives grew 9.2% between 2021 and 2022, according to Deltek.