The landscape in higher education is changing rapidly. Education budgets are shrinking across multiple fronts heading into 2024. Several key federal stimulus programs expire, leaving gaps many institutions have relied upon. State funding is diminishing, too, in areas with inflation-driven cost spikes. Personnel costs continue rising to retain faculty and staff in a competitive labor market.
The budget pain coincides with the falling enrollments afflicting many districts and colleges. Per the Center for Reinventing Public Education, nearly 40% of the largest U.S. school systems risk staff cuts or even closures due to reduced attendance. Between 2021 and 2022, higher education saw a 3.1% drop in fall enrollment according to National Student Clearinghouse data. While undergraduate enrollment is growing for the first time in several years, freshmen enrollment continues to decline, leading to declining revenue in the future.
These converging fiscal and demographic pressures create a complex climate in higher education. Efficiency has become mandatory. Yet student services cannot suffer amidst community needs. This reality has led procurement leaders towards cooperative agreements—with their inherent flexibility and economies of scale—as a strategic solution. As economic uncertainty mounts, cooperative purchasing enables institutions to stabilize costs and re-invest more in core academic priorities.
A cooperative agreement in higher education involves an agreement between partners to collaborate on projects, share resources, or pool buying efforts to leverage group buying power. When institutions pool their resources, they can secure better pricing and more favorable terms.
There are a few different types of cooperative agreements used in higher education, both for funding and procurement. The most common are:
Educational cooperative agreements can be tailored to address specific needs and objectives, but they all have the goal of sharing resources to improve outcomes.
The main thing to consider when weighing purchasing agreements vs. grants for education is that purchasing agreements and grants both provide funding but often come with different restrictions.
Grants offer financial assistance to higher education institutions with minimal intervention or oversight from the funding agency. They are suitable for projects that can be independently executed by the institution, leveraging its expertise.
In contrast, cooperative agreements are designed to establish a collaborative partnership between the funding agency and the institution. While providing financial support, the agency actively participates in the project, contributing expertise, resources, or personnel to ensure a cooperative and mutually beneficial execution.
These funding mechanisms should not be confused with cooperative agreements for procurement, but both play a part in how funds are allocated for purchasing.
Some of the key benefits of higher education cooperative agreements for purchasing include:
Engaging in cooperative agreements helps higher education institutions achieve significant cost savings across a diverse range of goods and services. By consolidating purchasing needs, colleges, and universities can harness their collective volume, enabling them to negotiate more favorable prices with vendors.
Through strategic collaboration, educational institutions can secure discounted rates on essentials like office supplies, technology, and services, ultimately optimizing their budget allocations.
Opting into cooperative agreements introduces a streamlined procurement process to reduce administrative burdens, allowing procurement teams to focus on strategic initiatives.
Ready-to-use contracts obtained through competitive solicitation eliminate the need for individual institutions to conduct their own time-consuming bidding and negotiation—saving valuable time and staff resources.
Cooperative agreements enhance access to a broader array of suppliers and products, expanding options beyond the types of suppliers that might respond to individual RFPs/RFQs. While academic institutions of all sizes benefit from cooperative agreements, they are particularly beneficial for smaller schools with limited procurement resources.
These agreements often encompass specialized goods and services that may be challenging for individual institutions to source independently. For example, identification and sourcing of sustainable and diverse suppliers is significantly easier when aggregating purchasing with other institutions.
Procurement teams are under increasing pressure to control costs while also complying with increased compliance regulations and policies. Cooperative agreements provide a consistent framework for institutions to adhere to contracts and regulations, mitigating risks associated with procurement.
By following established guidelines, institutions are protected from potential legal and ethical concerns, fostering a procurement environment that aligns with policies.
Within cooperative frameworks, institutions benefit from shared expertise and best practices. By aligning with other institutions and cooperative partners that are experts in higher education procurement, this knowledge can foster continuous improvement.
Collaborating with organizations like E&I Cooperative Services provides access to seasoned procurement professionals who specialize in the education sector.
Cooperative agreements make it easy to compare your current costs against those offered through cooperative contracts. Strategic-spend assessments can identify opportunities for cost reduction or supplier consolidation. Institutions can use spend analysis as a proactive tool to optimize budgets.
Education cooperative purchasing organizations help streamline the process of finding and opting into cooperative agreements.
E&I Cooperative Services operates as a member-owned organization that leverages the collective buying power of colleges, universities, and school districts to deliver savings and streamline procurement in a variety of ways.
An education-focused purchasing cooperative is founded on competitively sourced contracts for highly utilized goods and services tailored to academic institutions’ needs. E&I Cooperative Services has wide-ranging contracts spanning categories such as:
E&I Cooperative Services’ contracting process leverages volume discounts and favorable terms made possible by the combined annual spend of its 6,000 members. The experienced procurement team analyzes suppliers and competitive bidding agreements, with value, service commitment, and contract compliance prioritized alongside pricing.
Members shape agreements by serving on advisory councils that recommend enhancements. This governance involvement, along with E&I Cooperative Services’ non-profit structure aligns contracts with the unique needs of higher education. E&I Cooperative Services focuses exclusively on education.
E&I Cooperative Services memberships are free and offer flexible participation options. Institutions can select agreements as needs arise with no obligation to commit upfront. Once part of the member network spanning 50 states, schools directly interface with suppliers to make purchases under authorized contracts.
Contracts meet competitive solicitation standards set by the NIGP: The Institute for Public Procurement and meet generally accepted procurement standards. Practices have also been validated to meet new regulations in the U.S. Department of Education’s General Administrative Regulations (EDGAR).
Purchasing cooperatives deliver more than discounted products. E&I Cooperative Services offers a suite of online eProcurement tools, analytics platforms, and training resources to empower procurement strategies beyond just transactions.
No-cost spend analysis helps members gain insights from past purchases and external benchmarks. By comparing current spending against available cooperative agreements, colleges and universities can better understand best-in-class pricing and find opportunities to reduce costs and consolidate vendors for better volume pricing.
Additionally, automated contract tracking provides visibility into usage trends and snapshot comparisons of pricing across suppliers. This unlocks data-driven decision-making potential for procurement teams.
Many suppliers offer exclusive contract incentives and rebates to help serve as an additional inducement in cooperative purchasing programs. This can help turn your procurement process into a revenue generator for your institution.
E&I Cooperative Services members also share in the profits of the organization. Based on participation levels, member institutions may be eligible for year-end patronage refunds.
To maximize the benefits of cooperative agreements for higher education, you need to choose the right partner that focuses on the educational sector and understands your unique requirements. Following a step-by-step process, you can find the right partner and optimize your outcomes.
Begin by conducting a thorough assessment of your educational institution’s current process, specific needs, and goals. Identify the highest spend categories and contracts approaching renewal. Establish specific targets for cost savings through cooperative agreements.
Example: By analyzing historical spending patterns, identify areas where cost savings can be maximized, such as negotiating a 10% reduction in office supplies expenses.
Research various cooperative purchasing agreement options. Compare factors such as contract pricing, terms, sector expertise, purchasing power, and service offerings. Prioritize agreements with greater purchasing leverage in high-expenditure categories, leading to improved negotiated pricing and options.
Example: When considering potential partners, prioritize those with a proven track record of working effectively with educational institutions, offering additional benefits like customized spend analytics and dedicated account management.
Compare existing education cooperative agreements with current contracts to identify potential cost savings. Evaluate purchasing side-by-side with cooperative agreements to determine best-in-class pricing. Consider opting into cooperative purchasing agreements or utilizing them to establish baseline pricing for future negotiations.
Example: Conduct a detailed analysis of contract terms, including payment methods, delivery timelines, termination policies, and liability, ensuring alignment with institutional standards.
If your educational institution hasn’t leveraged education cooperative agreements before, secure buy-in from stakeholders by presenting a compelling business case. Demonstrate the potential for cost savings and streamlined procurement processes through data analysis, showcasing reduced transaction volume and labor savings.
Example: Use data analytics to illustrate how cooperative agreements can lead to substantial savings compared to current spending, overcoming potential resistance to change from longstanding supplier relationships.
Want to learn more about E&I Cooperative Services and how we can benefit your higher education institution? We have dedicated reps who are experienced higher education procurement experts. Find your rep and get in touch.
What is the purpose of a cooperative agreement in education?
A cooperative agreement in education enables collaborative purchasing efforts between educational institutions. By leveraging the combined buying power of multiple entities, cooperative agreements can achieve significant cost savings, enhance procurement efficiency, and provide access to favorable terms and conditions.
What is an example of an education purchasing cooperative?
An example of an education purchasing cooperative is E&I Cooperative Services. E&I is a cooperative purchasing organization that aggregates the purchasing power of educational institutions. E&I’ provides member institutions with access to a diverse range of competitively solicited contracts and expert guidance to make data-driven decisions about procurement.
What is the difference between a contract and a cooperative agreement in education?
In education, a contract typically involves a direct agreement between a single educational institution and a vendor or supplier. It is a legally binding document outlining specific terms, conditions, and obligations. On the other hand, a cooperative agreement involves multiple educational institutions collaboratively entering into an agreement with a vendor. The key difference lies in the collective purchasing power harnessed through cooperation, enabling institutions to secure more favorable terms, pricing, and conditions than they might individually.
Can educational institutions customize cooperative agreements to meet their specific needs?
Educational institutions often have the flexibility to customize cooperative agreements to align with their specific needs. While cooperative agreements provide standardized terms for efficiency, institutions can negotiate specific terms, services, or conditions to address their particular requirements. This customization allows institutions to tailor the agreement to their individual preferences without compromising the benefits of collective purchasing power.