New Jersey township uses the power of cooperative purchasing

Case Studies October 01, 2014
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After working hours of overtime cleaning up after Hurricane Sandy in 2012, it became clear that the Sparta Township, N.J., Department of Public Works needed to replace its 1994 wheel loader to help keep roadways clear of debris, leaves and snow.
 
With the department doing more with less (staff was down to 18 from a peak of 28), the only question was how to acquire a new machine in the least expensive manner.
 
“The NIPA contract was the most cost-effective way of getting the wheel loader that we wanted. We were able to purchase two new Cat wheel loaders for the price of one because of the trade-in option,” said James Zepp, department head.
 
Using a National IPA (NIPA) contract, the department traded in a pair of older wheel loaders and purchased a pair of new Cat 924K wheel loaders.
 
Zepp wanted a trade-in because funds typically stay in the agency’s equipment budget. Money received for a machine sold at auction often goes to the general surplus fund and may not be returned to the department that sold the equipment. Foley Cat personnel made Zepp aware of a NIPA contract with Caterpillar that allowed a trade-in to replace aging machines. “That was a huge advantage to us,” said Zepp.
 
National contracts provide the same cost and time savings as piggybacking onto a state or cooperative contract, but enable agencies to trade in equipment. On average, NIPA contracts save $7,000 to $10,000 in administrative costs.
 
The wheel loaders will be used to remove snow from the township’s 142 cul-de-sacs.
 
Instead of waiting as long as six months after a bid is let to take possession of machines, Sparta Township crews were working with the new wheel loaders after just two weeks.
 
Zepp wanted both machines to have the same features and be configured exactly the same. Purchasing two of the same models saves the time and expense of training employees to operate different machines. Also, the department doesn’t need to stock a variety of parts, and all attachments are interchangeable.
 
The NIPA contract adheres to New Jersey public contract law, which requires that all purchasing be transparent. The township advertised the item to enable other dealers to put together a bid, and tested other brands of wheel loaders.
 
Soliciting bids, a state contract or a cooperative contract may be best in some situations. “We’re not married to only one method of purchasing,” Zepp said.

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