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The procurement landscape in higher education is changing in 2026, squeezing budgets and impacting how procurement teams have to work.
2026 is the first year of the projected 15-year downward trend in undergraduate enrollments. Cooperative models are becoming increasingly important for finding cost savings.
Continued concerns over federal and state funding come at a time when college operating expenses continue to rise, up 3.6% in 2025 and outpacing inflation. 40% of institutions say they are pursuing more shared services and cooperative agreements as a result.
Procurement teams are moving upstream to find savings, developing deeper relationships with suppliers earlier in the sourcing process. 70% of product costs occur during the initial design and sourcing phases.
Approximately 64% of procurement leaders say that data analytics are key to improving procurement, yet 41% report that they currently lack the data they need.
Overcoming these challenges and shifting to value creation requires a rethinking of how procurement teams approach their job, including looking for alternatives that lower costs and streamline systems so more time can be spent on value creation and data analytics. Within this structure, cooperative purchasing is playing an increased role. However, there is often confusion about what is a group purchasing organization, what is a buying group, what is a cooperative, and more importantly, how can these organizations help meet the challenges educational institutions face?
A group purchasing organization aggregates demand from multiple institutions to negotiate contracts with suppliers. By combining purchasing volume, GPO benefits include the pricing, terms, and service levels that individual institutions may struggle to obtain on their own. In education, a group purchasing organization typically offers access to pre-negotiated contracts across common spend categories.
An example would be IT. As many institutions have similar needs for IT infrastructure, group purchasing can help lower costs. That’s important right now because 42% of IT leaders surveyed by EDUCAUSE say they expect budget decreases despite the fact that IT continues to evolve and student and faculty expectations are higher than ever.
A buying group is a form of collective purchasing where institutions come together to aggregate their demand for specific categories or suppliers. Buying groups may operate within a broader GPO or cooperative structure, or they may be formed around a narrow set of shared needs. For example, the Massachusetts School Building Authority (MSBA) helps in-state school districts acquire furniture for classrooms and cafeterias.
Regardless of the structure, group purchasing relies on voluntary participation. For most organizations, you are not required to use all of the contracts available, although some have minimum purchasing obligations.
By aggregating demand across institutions, group purchasing agreements typically reduce costs and may offer additional incentives. Volume discounts can be significant with group purchasing.
It’s common for institutions to realize 10% to 15% cost savings when adopting cooperative agreements with E&I Cooperative Services, but there’s another key benefit. Some institutions report reducing procurement timelines by as much as 70% with GPO contracts.
Typically, GPO contracts include a competitive solicitation process designed to meet public and nonprofit procurement requirements. Suppliers are evaluated based on:
This is one area where working with an education-focused cooperative like E&I is a significant benefit. While GPOs benefits may address public procurement compliance, E&I’s sole focus on education makes sure group purchasing agreements comply with the unique needs of academic institutions.
A cooperative purchasing organization differs from a traditional GPO in structure and governance. E&I is a cooperative, owned by its members and operates as a nonprofit entity rather than as a for-profit company.
Cooperative purchasing operates on the same principle of aggregated demand, but with member ownership at its core. Contracts are competitively solicited, but they are shaped by the needs and priorities of the member institutions themselves. This model emphasizes long-term alignment rather than just transactional volume.
Governance is a significant area of difference between GPOs and cooperatives. In many GPO models, decision-making authority is centralized, and institutions have limited influence beyond contract utilization.
Cooperatives, by contrast, are governed by their members. Boards and advisory groups composed of institutional representatives guide priorities and oversight. This governance structure affects which categories are sourced, how suppliers are evaluated, and how success is measured.
GPOs and cooperatives also differ in how they are funded. Many GPOs rely on supplier-paid administrative fees tied to transaction volume. While this model can drive competitive pricing, it may also emphasize high-spend categories over institution-specific needs.
This is an important distinction. For-profit entities can provide discounts, but their goal is to maximize returns for their investors. A cooperative like E&I reinvests proceeds into member services rather than distributing profits. In addition, E&I Cooperative Services provides patronage refunds annually based on participation. E&I typically returns millions of dollars to institutions each year, helping to turn procurement from a cost center to a revenue-generating activity. Through E&I Cooperative Services, some cooperative agreements also provide additional incentives or rebates based on purchasing volume.
Here’s how each of these types of group compare.
AREA | GPOs and BUYING GROUPS | E&I’s Cooperative Model |
Governance | Centrally managed | Member-governed |
Ownership | For-profit or nonprofit | Member-owned nonprofit |
Financial incentives | Transaction-driven | Reinvested in members |
Contract development | Broad public sector focus | Education-specific focus |
Compliance support | Standardized | Aligned with educational institutions |
Strategic services | Limited | Expanded and member-driven |
While cost reduction and time savings are two of the biggest benefits of group purchasing agreements, procurement teams need to evaluate other factors to ensure alignment with institutional goals. The ultimate responsibility for compliance and financial stewardship is yours, so you will want to do your own evaluation of cooperative contracts and any GPO or cooperative you work with.
Competitive Solicitation and Documentation
Confirm that the cooperative agreement was established through a documented, competitive solicitation process that meets you procurement requirements. This includes access to RFPs, evaluation criteria, award justifications, and supplier disclosures.
Compliance Alignment
Review how the agreement aligns with applicable state statutes, institutional policies, grant requirements, and audit standards. Cooperative agreements should clearly demonstrate compliance defensibility, especially for decentralized or multi-campus institutions.
Contract Scope and Flexibility
Evaluate whether the agreement provides sufficient flexibility for your needs, giving you the option to make specific purchasing decisions within the framework. Cooperative agreements should support your needs without forcing unnecessary standardization.
Pricing Structure and Transparency
Understand how pricing is established, maintained, and adjusted over time. This includes escalation clauses, volume thresholds, rebates, and any administrative fees. This is especially important as costs increase and government policies change. Tariffs, for example, have caused volatile pricing, especially in key areas like technology and lab supplies. A KPMG survey showed that 44% of businesses had already adjusted prices as of October 2025, and 71% expect to see price increases in the next six months of between 5% and 15%.
One benefit of group purchasing agreements is that they often include defined price resets to help you plan budgets more efficiently and limit the impact of price volatility.
Term Length, Renewals, and Exit Provisions
Review the initial term, renewal options, and termination rights. Cooperative agreements should allow you to exit without significant penalty if requirements change or performance expectations are not met.
Supplier Performance Expectations
Assess how service levels, delivery timelines, reporting requirements, and issue resolution are handled. Strong cooperative agreements should allow you to monitor supplier performance and address underperformance.
Institutional Risk and Liability Considerations
Examine indemnification language, insurance requirements, data security provisions, and any risk-sharing clauses. Agreements should clearly define responsibilities to protect the participating institutions.
Adoption and Implementation Support
Consider what onboarding, training, catalog enablement, or implementation assistance is provided. Even well-structured cooperative agreements require internal adoption to deliver value.
Data, Reporting, and Spend Visibility
Determine whether the cooperative provides access to utilization data, spend reporting, and benchmarking insights. These tools are essential for validating outcomes and helping you meet your procurement goals.
For institutions looking to manage costs, data is key to uncovering hidden savings by analyzing spending patterns, identifying off-contract spend, and finding consolidation opportunities. A strategic spend analysis can often find significant savings opportunities and ways to streamline your supplier management at the same time.
Alignment With Institutional Priorities
Evaluate how the agreement supports your broader goals, such as supplier diversity, sustainability, equity initiatives, or long-term cost containment, over the course of the group purchasing agreement.
E&I Cooperative Services is the nation’s only member-owned nonprofit sourcing cooperative focused exclusively on education.
In addition to hundreds of competitively solicited cooperative agreements, members gain access to a wide variety of tools and support, including:
In addition, the E&I Economic Benefit ModelTM is part of every contract, focusing on cost reduction, cost avoidance, incentives, and revenue opportunities. This holistic approach delivers greater value
One area that is often undervalued is category expertise. E&I is made up of higher education procurement leaders with deep insight into particular categories of good and services.
This is especially important when you are sourcing emerging trends. For example, many academic institutions are now investing in AI infrastructure and cybersecurity, two fields that are changing rapidly. Besides the technology shifts, the terms and conditions associated with these disciplines are evolving as well. Negotiating these complex terms can be challenging without the specific expertise that E&I’s team can provide.
Another area where this applies is in RFP development. According to the National Cooperative Procurement Partners (NCPP), organizations spend an average of 87.1 hours of personnel time for RFPs and more than 138 hours for complex projects. While some RFPs may be for unique situations that are highly specific, many are for the same or similar goods and services that other institutions are buying.
E&I’s category experts competitively solicit contracts on your behalf, saving you considerable time in drafting, publishing, evaluating, scoring, and negotiating contracts on your own. In turn, this accelerates procurement timelines while also reducing costs.
What is the difference between a group purchasing organization and a cooperative?
While both do group purchasing and aggregate demand to negotiate contracts, a cooperative is member-owned and governed by members.
Are group purchasing agreements compliant for higher education procurement?
Yes. Cooperative contracts are competitively solicited and designed to meet public procurement requirements.
Specifically, are cooperative contracts compliant with EDGAR and 2 CFR 200?
Yes, if the cooperative follows specific competitive solicitation standards. For educational institutions using federal grant funds, compliance with EDGAR (Education Department General Administrative Regulations) is mandatory. E&I’s contracts are designed to meet these federal requirements.
How do buying groups fit into group purchasing strategies?
Buying groups aggregate demand for specific categories, often in designated areas.
Does using a GPO or cooperative replace the need for an internal RFP?
It doesn’t eliminate RFPs, but it can significantly reduce the number of RFPs you need and still produce compliant, competitively solicited contracts. Many institutions also find that cooperatives get better (and broader) responses to solicitation because of the volume they represent.
What should institutions review before signing a group purchasing agreement?
You should review compliance documentation, contract terms, renewal clauses, and alignment with your internal policies.
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