5 Types of Drug Testing Consortia
1. Purchasing Cooperative
In a purchasing cooperative model, the drug testing consortium contracts for services at a volume price. This way, they can take advantage of large-volume buying power and management efficiencies. Suppliers would deal with each employer. This model is like a cooperative formed by a group of small retailers to buy merchandise at volume discounts. In this case, the cooperative or consortium negotiates terms and conditions with suppliers. The actual orders for and delivery of goods and services are between the individual members and the suppliers.
2. Separate Entity
If the number of employees represented by all consortium members is large enough, it may be cost-effective to form a separate entity. The drug testing consortium hires a manager. Their responsibility is to provide services at the cost of purchasing the services, plus the costs incurred in operating the consortium. An example is a food cooperative.
Consumers form cooperatives because they want the highest quality product at the lowest price.
3. Managing Partner
In this model, smaller employers contract for services with larger employers. A large employer that has the staff and resources to service its own drug and alcohol testing program may also be able to sell surplus staff time to small employers. This provides an economic benefit to both. This model is like a limited partnership in which investors pool resources. Usually, the investor with the greatest investment becomes the managing partner. They're responsible for managing and making decisions for the partnership.
4. External Management/Third-Party Administrators
Under this model, employers contract with a company that provides the services desired. The management company should demonstrate expertise in the substance abuse field. This includes the DOT's Procedures for Transportation Workplace Drug and Alcohol Programs. This model is like a pension fund management service or an insurance health benefits manager. A given management company may operate more than one consortium.
A consortium with a full-time controlled drug and alcohol testing program manager provides the members with specialized expertise. This way, each member won't have to hire their own specialist to run a program. This can often prove cost-effective since it spreads administrative costs over a greater base. It also provides greater expertise than any consortium member is likely to have on its staff without extra hiring.
Regardless of the type of consortium you join, you should realize that you are entering into a contractual relationship. You need to protect your business interests. Although you are implementing the regulations through a consortium, you remain responsible to the DOT and applicable state or local laws for implementing those regulations.
This means that if the consortium is implementing some aspect of the program wrong, you are implementing it wrong. You could be subject to fines and penalties. You should exercise due diligence in selecting a consortium and in monitoring consortium operations.
Depending on your business needs and those of other consortium members, you may buy a variety of required or optional services from the consortium. Also, depending on the consortium structure, you may have to buy all services or only buy on an as-needed basis. Be sure you have a solid contract in place that states exactly what services they are providing for you and pricing. Beware of small administration fees that can add up. The contract should also state that they provide services under 49 CFR Part 40, applicable DOT agencies, Federal, State and local laws and regulations.
If you're still not sure which type of drug testing consortium is right for you, contact other employers participating in consortia. Ask about their experiences and find out whether their approaches might work for you.
Screensoft provides drug testing consortium services under a Third-Party Administrator model. Have questions? Comment below and we'll be happy to answer.