Group purchasing organizations for higher education competitively solicit contracts or create negotiated contracts, contracts on behalf of multiple organizations. With a focus on reducing costs and streamlining procurement, higher education group purchasing organizations (GPOs) have become increasingly popular.
In this article, we will explain how GPOs work and how to find the right partner for your academic institution.
GPOs leverage combined spending across institutions to negotiate discounts and preferred provider agreements that individual institutions would be unlikely to secure on their own. The collective buying power also tends to attract more suppliers due to larger contract sizes.
Agreements can cover a wide variety of goods and services, including:
In most cases, members pay a fee to access the contracts, which are offset by the savings realized. E&I Cooperative Services acts as a GPO for higher education but with a significant difference. E&I Cooperative Services is the only member-owned, non-profit cooperative focused solely on education, and higher educational institutions can join at no cost. Additionally, we exist solely for the benefit of our members, and we return our profits back to members in the form of patronage, which is purely unique from any other GPO.
Partnering with a GPO for procurement can produce several key benefits, including:
The most obvious benefit is the significant cost savings GPOs deliver by leveraging volume discounts across institutions to reduce prices.
GPOs often negotiate agreements with multiple suppliers for the same general product category. This approach provides members with more choices and opportunities to compare and optimize value.
Higher education group purchasing organizations are typically staffed with procurement experts who have specialized knowledge and resources to negotiate optimal pricing, terms, and conditions. Due to the volume of contracts they negotiate, they know industry standards and work to get best-in-class agreements.
Some GPOs will conduct spend analysis, evaluating member institutions’ spending across categories to look for contracts that can reduce costs or areas where consolidation creates volume discounts.
Cooperative agreements can significantly reduce the time staff must spend sourcing suppliers, evaluating options, negotiating prices, and managing contracts. Some GPOs will also offer eProcurement solutions, facilitating end-to-end digital transactions.
Staff will ensure all agreements meet higher education bid and procurement regulations. Contract terms are clearly published for members, providing transparency so member organizations can make sure institutional policies align with contract terms.
Many GPOs emphasize sustainability in contracting, including standards around recycled content, reduced packaging waste, and energy conservation to help colleges and universities meet sustainability goals.
With the right partner organization, schools and colleges also have access to a broader group of suppliers, including Tier 1 and Tier 2 certified diverse suppliers.
Selecting the right GPO is crucial, and GPOs do not all operate the same way. Here are some of the key things you will want to investigate before making a decision:
Your best strategy is to look for a member organization that focuses exclusively on the education sector. This provides deep insight into the unique needs and operations of educational institutions to negotiate prices and conditions more favorable to colleges and universities.
When looking at procurement options, you should also inquire about potential rebates and incentives. Many of the suppliers working with E&I Cooperative Services, for example, provide rebates and incentives to schools that opt into cooperative agreements. As a member-owned cooperative, E&I Cooperative Services also provides year-end refunds in the form of patronage members based on purchasing levels.
E&I Cooperative Services offers a broad portfolio of competitively solicited cooperative purchasing agreements for education, helping its more than 6,000 member institutions make more informed, analytics-driven decisions.
Save money, expand your supplier options, and streamline your higher education procurement. Contact E&I Cooperative Services today to learn about the benefits of becoming a member.