Buying from or contracting with a cooperative

A 308B cooperative may sign contracts, so you can buy from it or hire it. Chapter 308B gives it no preference in bidding and imposes no special rule on you. The questions that are specific to a cooperative are: who has authority to sign, whether it is currently in existence, and who is liable if performance fails. The statute answers those; the bidding rules come from your own procurement law.

What the cooperative may do (statute)#

• It may contract, including contracts with members, and may issue debt instruments § 308B.301, subds. 1, 3 and 6 ^P1.
• The board acts for it. A director has no authority to act for the cooperative unless the board authorizes it § 308B.401 ^P1.
• Officers other than a chief executive officer cannot bind it without board authorization. A chief executive officer, if the board has employed one, can implement the cooperative's functions except as the board restricts, but cannot exercise authority reserved to the board or members § 308B.475, subds. 1(c) and 5 ^P1.
• A member is not personally liable on the cooperative's contracts merely because of being a member § 308B.505 ^P1. Your remedy for non-performance is against the cooperative and, if you required them, any bond or guarantee. Whether you ask for a personal guarantee from a member or director is a negotiation, not a statutory right.

Who to have sign#

If the cooperative has no CEO and no resolution, the statute does not say who, as a default, can bind it; see Chapter 308B questions, drafting observations and resolved filing issues.

Check existence on the signing date#

A cooperative that missed its annual renewal is administratively dissolved. If it reinstates, the reinstatement retroactively validates contracts and acts within the authority of its articles and the cooperative is liable for them § 308B.121, subd. 5 ^P1. Check its Secretary of State record before signing; see Verify that a cooperative exists and is in good standing ^L2.

Bidding thresholds (your law, not 308B)#

The Uniform Municipal Contracting Law covers counties, towns, cities and school districts, but its definition of contract is limited to supplies, materials, equipment rental, and construction, alteration, repair or maintenance of real or personal property. Do not apply this table to every professional or other service contract merely because a municipality is the buyer ^{L4, subds. 1-2}. The 2025 text, rechecked 2026-10-16, gives these general tiers:

Best-value alternatives for specified construction-related work also appear in the middle and lower tiers; they are not confined to contracts above $175,000. Other exceptions include specified county/town equipment rental and cooperative purchasing. Read the relevant subdivision and local rules rather than treating the table as exhaustive ^{L4, subds. 3a-5a, 15}.

These general tiers do not create a cooperative-vendor preference. Separate eligibility requirements, set-asides and program conditions may still matter ^L4.

Two meanings of "cooperative" in procurement#

• A 308B (or 308A) cooperative is a business entity, discussed on this site.
• A cooperative purchasing arrangement is a way for governments to buy together, for example through a state contract. The contracting statute has its own subdivision on cooperative purchasing ^L4. That arrangement is unrelated to chapter 308B. If a vendor tells you it is "cooperative" or "co-op" priced, find out which meaning is meant.

Small targeted group set-asides#

The contracting statute allows a municipality to adopt a set-aside for "small targeted group businesses", a term defined by reference to another statute (the state's list of designated businesses). In that subdivision, "business entity" is defined as an entity "organized for profit", including an "association, or cooperative" ^L4.

What to look up locally#

1. Your purchasing policy and any delegation of authority (who may sign for the city or county, and up to what amount).
2. Whether your contracts require insurance, performance or payment bonds, prevailing wage or other terms and whether any of them is affected by the vendor being a cooperative.
3. Whether your forms ask for "owners" or "officers" and how a cooperative should answer; see Licensing, zoning and permits when the applicant is a cooperative.
4. Any conflict-of-interest policy. A cooperative's own conflict rules for directors are in § 308B.461; they govern its directors, not yours.