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While pricing increases may not reach the significant jumps we’ve seen over the past few years, costs for higher education continue to rise. The Higher Education Price Index (HEPI) shows that inflation at U.S. colleges and universities rose another 2.6% in fiscal year 2025 on top of a 2.4% increase the year before. State funding rarely keeps pace, and concerns over enrollment and federal grants puts additional strain on budgets. Procurement teams are asked to absorb these price increases while maintaining service levels and compliance. For procurement teams unfamiliar with cooperative models, understanding what are GPO contracts and how they differ from traditional institutional agreements is the first step toward evaluating whether this approach aligns with institutional priorities.
Institutions today are scrutinizing every sourcing decision. Group purchasing organizations (GPOs) can provide savings, so understanding GPO pricing and how cooperative contracts work is increasingly important to offset rising costs.
GPO contracts are competitively solicited agreements negotiated by a group purchasing organization on behalf of multiple institutions (members). Instead of each college or university negotiating separately, the GPO aggregates demand across its membership and conducts a single sourcing event.
This structure fundamentally changes pricing dynamics. Suppliers do not negotiate with one institution at a time but compete for access to a large, stable pool of higher education spend. In exchange, suppliers offer pricing, terms, and service commitments that would be difficult for most institutions to achieve independently.
In other words, GPO pricing is not a discount layered onto existing contracts. It is the result of a different economic model.
To understand how institutions achieve consistent savings, it helps to look at how GPO pricing is built.
Aggregated volume is the most visible driver. When suppliers can forecast demand across hundreds or thousands of institutions, they can price more aggressively and plan more efficiently.
Competitive solicitation is equally important.
GPOs benchmark suppliers against one another through formal sourcing processes, creating pricing discipline that typically outpaces traditional RFPs from individual institutions, even those with multiple campuses.
Standardized terms also contribute to lower costs. Suppliers can reduce legal, sales, and administrative overhead when they can operate under consistent contract language across multiple institutions, and this is reflected in lower costs.
These cooperative contracts represent significant business for suppliers, also helping them reduce their cost of sale and passing it on to higher education institutions.
The 10–15% savings often associated with GPO pricing rarely come from a single line item. Instead, it is the cumulative result of multiple factors, including:
Over time, these savings can create measurable budget relief.
Individually negotiated contracts can deliver strong results in certain scenarios, particularly for large or highly specialized purchases. However, they require significant internal effort and often depend on timing and leverage.
GPO pricing prioritizes consistency and scalability. While a single negotiation may occasionally outperform a cooperative contract on price, GPO agreements typically provide predictable savings across multiple categories and budget cycles.
For many institutions, the real advantage is not winning one negotiation but maintaining lower total procurement costs year after year.
Besides lower costs, you get pricing transparency through documented competitive solicitations, clear pricing structures, and audit-ready contract files. You retain visibility into pricing and contract terms while benefiting from centralized sourcing. This balance of transparency and efficiency is particularly important in public and nonprofit higher education environments.
GPO contracts also help you reduce off-contract spend. For example, putting together a list of approved suppliers and using punch-out catalogs as part of an eProcurement solutions can stop maverick spending to ensure you leverage negotiated savings. When GPO pricing is paired with internal discipline, institutions are better positioned to counter inflationary pressure.
As inflation continues to affect higher education operating costs, procurement teams need sourcing strategies that deliver repeatable value.
E&I Cooperative Services is the only nonprofit member-owned sourcing cooperative focused exclusively on education. E&I structures contracts around the realities of academic procurement rather than broader public-sector priorities. With more than 6,200 member institutions and approximately $3 billion in annual member purchasing, E&I combines scale with an education-only mission. For institutions looking to stabilize costs, reduce administrative burden, and access pricing designed specifically for education, exploring E&I’s cooperative contracts can save you time and money.
Learn more about E&I Cooperative Services and how we connect academic institutions with top-tier suppliers to help reduce the impact of rising prices. Schedule a consultative assessment today and get started.