Cleaning & Maintenance Management Online
June 2014 Contractor Success

Joining A Group Purchasing Organization

Pooling the purchasing power of service contract companies to create discounts.

June 9, 2014

Industries that are largely comprised of small businesses can realize huge benefits through a group purchasing organization (GPO).

These organizations pool the purchasing power of the members to negotiate significant discounts from suppliers covering the goods and services they use in their business every day.

GPOs are most commonly found in the healthcare, foodservice and grocery industries but have expanded into many other industries in recent years — even into nonprofit organizations.

National Service Alliance (NSA) is a GPO that was started in 1996 by several independently-owned building service contractors.

Over time NSA has recruited additional members, and today the organization represents over $1.7 billion in collective revenues.

This gives NSA significant leverage when negotiating national contracts with product manufacturers and service providers.

Guy Mingo, chief executive officer (CEO) of Marsden Holding, a privately owned security and facility service provider primarily serving the mid-western and western U.S. says, “NSA provides the purchasing power we need to be competitive in today’s market. It’s vital to realize every cost advantage possible, and NSA is a key partner for us in this effort.”

When NSA first formed, a few vendor partnerships for core janitorial products were negotiated.

Over the years, this vendor base has expanded to include a wide variety of products and services used daily in the facilities management industry.

The additional vendor partners offer significant discounts on equipment purchase and rental, office supplies and services, fleet and rental car services, core business needs and technology solutions.

Advantageous Partnerships

A partnership with Sprint provides members with cell phone services, and they can take advantage of programs many building service contractors may not consider, such as safe driving practices, GPS tracking of employees for better service routing, timekeeping and payroll solutions, etc.

NSA negotiates savings with vendors leaving building service contractors (BSCs) and related businesses more time to focus on what really matters.

Paul Greenland, president of Aetna Building Maintenance, a regional janitorial, facilities management and industrial support service provider in the Midwest sums this up by saying, “By purchasing cell phones, office supplies, chemicals, vehicles and equipment though my NSA contracts, I easily save more than $50,000 per year. Plus, NSA takes care of the negotiations so I can focus on business, not pricing agreements.”

Members receive contractually protected pricing and can continue to purchase consumables from their loyal and trusted distributors — saving money without disrupting their established supply chain or retraining site personnel.

Members can also purchase a wide variety of equipment and services directly from the manufacturer or service provider, eliminating the distributor markup.

Companies can realize savings of 50 percent or more on consumables, equipment and services.

The NSA team works with the vendor partners to monitor product use and ensure members get the best value for the goods and services they need to run their business.

According to Stanley Doobin, president of Harvard Maintenance, a national janitorial, facilities and building maintenance services provider based in New York with satellite offices across the U.S., “Our savings are amazing and we recoup our membership fee in just one week. How can you afford to pass on an NSA membership?”

Members can take advantage of order control and reporting tools that help monitor and manage their spending, making sure that each job stays within budget.

The end result is bidding and servicing jobs more profitably.

Members also have access to extensive training tools and webinars designed to improve employee productivity, delivering greater profitability.

Membership Opportunities

In addition, sponsored meetings provide opportunities to hear from top national speakers, share experiences and network with peers and vendor partners.

Further, the investment in membership can pay dividends through significant savings and year-end rebates.

“NSA’s purchasing power and education programs helped reduce our costs and significantly improve our profitability,” says Yasser Youssef, president of The Budd Group, a janitorial, maintenance and landscaping services provider in the southeast.

Prior to joining, a dedicated representative will perform an initial cost analysis for a business and project the savings an operation should realize.

Once a business joins, a representative will guide an owner through the process to make sure he or she receives group pricing from preferred consumables distributors and access to direct pricing from many of NSA’s equipment and services partners.

A representative will continue to work with a company to ensure maximized savings and overall program benefits.

Bob Weintraub, chief executive officer (CEO) and owner of Service Management Group, a commercial cleaning and building maintenance provider for Connecticut, New York and New Jersey, states: “Joining NSA and getting started was easy. Our NSA rep took us step-by-step through the process on how to maximize the savings and other benefits offered to NSA members. Joining NSA was a smart move for SMG and we look forward to the savings we will realize every year.”