Administrative Fees: Creative Funding for Central Procurement in Difficult Economic Times

Source: National Association of State Procurement Officials, Research Brief, September 2009

Most states’ central procurement offices are funded via appropriation, self-funding, or a combination of the two. The 2009 NASPO Survey of State Purchasing Practices indicate that twenty-six (26) of forty-five (45) respondent states have central purchasing functions that are either all or partially self-funded. Some states have begun increasing their use of administrative fees as a method for funding central procurement offices. These fees can be imposed on vendors or on customer agencies depending on the structure of individual states’ fee systems, and are collected in a variety of ways.

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