E&I Members: Make Your Voice Heard in Less Than a Minute! Help us improve your experience-fast, simple, and meaningful.
Group purchasing organizations are well established in higher education procurement. When used effectively, GPOs can deliver measurable value, often producing cost savings in the 20–25% range by combining demand across hundreds or even thousands of institutions.
At the same time, experienced procurement leaders understand that GPOs are not right for every purchasing decision.
The key advantages of group purchasing organizations are both operational and strategic.
The most visible benefit you get is volume discounts. By aggregating demand across institutions, you create purchasing power that individual campuses, and even large research universities, typically can’t achieve on their own. The result? Often, this means lower unit prices, better terms, and stronger commitments from suppliers.
For procurement teams, this aggregation also improves budget predictability. You can often realize multi-year pricing structures and defined price reset periods. This makes it significantly easier to forecast costs and reduce volatility.
When GPO contracts are competitively solicited and structured to meet your compliance needs, it reduces much of your workload. This has become more important lately as procurement teams are dealing with a loss of institutional knowledge due to retirement and, often, smaller teams overall.
The time you save with GPO contracts can dramatically reduce administrative overhead and accelerate the procurement process.
As a result of faster overall procurement, you also improve speed to value. Because you can access pre-vetted suppliers and established agreements, procurement cycles shrink.
This speed to value can be especially beneficial during transitional periods like system implementation, a facility expansion, or for unplanned needs. Rather than starting from scratch, you can leverage existing contracts to move quickly while remaining compliant.
Another advantage of group purchasing organizations is compliance. For example, E&I Cooperative Services negotiates cooperative agreements with GPO compliance in mind. Standardized terms and conditions align with public procurement requirements. Because E&I is the only member-owned, nonprofit sourcing cooperative that exclusively serves the education sector, team members have a deep understanding of the unique compliance requirements in higher education, which helps to reduce risk.
Despite these benefits, there are a few disadvantages of GPOs, which you need to consider.
GPO contracts are designed to serve broad member needs. While most cooperative agreements are designed for flexibility, they may not always meet your specific requirements. For example, highly specialized lab equipment may be covered by a cooperative contract, but it may not include the particular type required as part of compliance with grant requirements.
Standardized contracts can sometimes encounter resistance from departments, especially in decentralized purchasing environments. Department heads may feel like they are losing their autonomy to select the suppliers they want.
Without clear communication around value, compliance, and institutional priorities, cooperative agreements may be perceived as overly restrictive.
Not every GPO contract delivers the same level of savings or performance. Value can vary significantly by category, supplier competitiveness, and institutional adoption rates. Experienced procurement teams analyze utilization, pricing benchmarks, and off-contract spend to ensure that contracts deliver the outcomes needed.
There may also be a difference when it comes to institutional structure. For example, nonprofit cooperatives exist to serve member needs. For-profit GPOs exist to return profits to shareholders.
Advantages of GPOs | Disadvantages of GPOs |
Aggregated spend drives lower pricing | Limited customization for specialized needs |
Reduced sourcing and RFP workload | Potential resistance from decentralized stakeholders |
Faster access to vetted suppliers | Savings vary by category and utilization |
Built-in compliance safeguards | Not all GPOs operate the same way |
The most effective procurement organizations view GPOs as one component of a broader operating model. Strategic use begins with alignment, making sure contracts align with institutional priorities, stakeholder needs, and long-term financial objectives.
“By aligning your operating model with your organization’s priorities and stakeholder needs, procurement can transition from being seen as a cost controller to becoming a business enabler.” — Philip Ideson, Art of Procurement
Data and analytics also play a big role here. Spend analysis helps identify where GPO contracts deliver real value, where consolidation can produce greater volume differences, and where off-contract spend is preventing cost savings.
A clear understanding of both the advantages of group purchasing organizations and the disadvantages of GPOs makes for better decisions. The strongest procurement organizations balance cooperative contracts with data-driven analysis, stakeholder engagement, and strategic sourcing discipline.
Explore education-focused cooperative contracts and procurement resources through E&I Cooperative Services to determine how a strategic GPO approach can support your institution’s procurement objectives.