Higher education institutions face a perfect storm of financial challenges. Tariffs, inflation, funding challenges, and uncertain enrollment income—all of these factors drive up the cost of goods and make budget cuts a reality.
Finding a solution that balances financial responsibility with high-quality outcomes is more challenging than ever. Leveraging GPO pricing through cooperative contracts can do exactly that, helping you save money without sacrificing quality.
Operating costs for colleges and universities rose by 3.4% in 2024. That might not be a problem in some years, but the increase outpaced tuition hikes, leaving many institutions with tighter margins and tougher decisions. Now, with threats to federal funding and the potential for an economic downturn, the situation is unsettled.
The choices are troubling. Many academic institutions paused research projects due to NIH funding cancellations, laid off staff, and eliminated degree programs. This can lead to compounding problems.
“As U.S. institutions brace for possible federal or state reductions in institutional funding and/or student aid, they are also aware that budget reductions to programs and services can significantly affect student retention and recruitment, setting up a potential cycle of fiscal distress.” – Hanover Research, 2025
It can no longer be business as usual. Higher ed procurement teams must find innovative solutions and stretch every dollar as far as possible.
Group purchasing organizations (GPOs) secure contracts with suppliers on behalf of their members through competitive solicitations or direct negotiations. While not all GPOs operate as cooperatives, members can benefit from cooperative or group contracts that provide access to pre-negotiated pricing, favorable terms, and established supplier relationships—without needing to run their own RFP processes.
Cooperative contracts leverage the combined purchasing power of hundreds or thousands of members to achieve greater volume discounts. By aggregating demand across many colleges and universities, GPOs can secure lower pricing than any single institution could achieve on its own.
Cooperative contracts are designed to meet strict compliance requirements, offering transparency when navigating complex procurement regulations.
One common misconception about group purchasing is that lower prices mean lower quality. In reality, GPO contracts are negotiated only after a rigorous competitive bidding process that evaluates suppliers based on a combination of pricing, service levels, quality standards, and past performance.
Institutions that leverage GPO pricing often see savings of 10–15% or more across a range of purchasing categories, including technology, lab equipment, office supplies, facilities maintenance, and food services. These savings can translate into millions of dollars over time, which can be reinvested into strategic priorities or offset funding losses.
Contracts span a broad range of top-tier suppliers with a proven track record in the education sector. Because these contracts represent significant business for suppliers, they are more likely to provide better service and support to keep the business.
In addition to direct cost savings, cooperative contracts deliver significant operational benefits. Procurement teams of all sizes can save substantial time and effort by leveraging competitively solicited contracts.
Rather than investing months into writing RFPs, evaluating bids, negotiating terms, and ensuring compliance, teams can focus on more strategic initiatives. This agility allows institutions to move faster when critical needs arise, whether that’s equipping a new lab, upgrading campus infrastructure, or trying to lock in prices before tariffs hit.
Cooperative contracts provide some cost predictability. With locked-in pricing and standardized terms, institutions can more accurately forecast their budgets and avoid surprises during fiscal planning cycles. While some agreements may include price adjustment clauses, these are structured and transparent—helping institutions avoid sudden sticker shock.
While you cannot safeguard against all risk, cooperative agreements do provide some protection against many common risks, such as non-performance or non-compliance. Because cooperative agreements are competitively solicited, they satisfy most state and federal procurement requirements. This minimizes legal exposure.
Many GPO contracts in higher ed are tailored specifically to meet sustainability and diversity initiatives, helping you meet broader institutional goals.
With rising costs, tight budgets, and concerns over federal funding, higher education institutions must be more strategic than ever in how they manage procurement. Cooperative contracts with GPO pricing can help lower your costs, minimize risk, and maintain the quality of goods and services delivered across campus.
Procurement leaders who embrace this model play an important role in helping secure the long-term financial sustainability of their institutions.
E&I Cooperative Services is the only member-owned non-profit sourcing cooperative focused exclusively on education. View hundreds of ready-to-use, competitively solicited cooperative contracts to see where you can start saving today.
