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You’re three weeks into evaluating bids for a new laboratory equipment contract when another urgent request lands on your desk. IT needs network infrastructure quotes by the end of the month, and Facilities is asking about updated pricing on janitorial supplies. Meanwhile, your team is already stretched thin managing supplier relationships, ensuring compliance, and trying to demonstrate value to institutional leadership. Sound familiar?
For many procurement professionals in education, this juggling act is simply part of the job. However, group purchasing organizations (GPOs) offer an alternative that helps you get a better handle on your to-do list and free up your time, while also saving money. But what are GPOs, and how do GPOs work? We’ll explain.
Group purchasing organizations combine the buying power of multiple organizations to achieve volume price discounts. GPOs are common in education, accounting for billions of dollars in spend each year.
The best GPOs, however, are more than just buying groups. They work as strategic partners that handle much of the time-consuming work of creating proposals for competitive solicitation, vetting suppliers, negotiating contracts, and building supplier relationships.
After contracts are finalized through the competitive process, members can begin purchasing immediately. There’s no need to conduct additional RFPs or engage in lengthy bidding cycles for those categories. You simply adopt the contract, place your order, and start realizing value.
The relationship doesn’t end there. Strong GPOs provide ongoing support to work as an extension of your procurement team to make sure you maximize your value. The result is more efficient procurement. You reduce administrative burden, cut costs, and maintain full compliance with purchasing regulations, all while freeing your team to focus on strategic initiatives that move your institution forward.
The theoretical benefits sound promising, but how do GPOs work in practice?
One analysis showed Washington State University (WSU) could save $50,000 a year working with a group purchasing organization. On the other side of the state, the much larger University of Washington forecast savings at about that much every month, reducing costs by up to half a million dollars a year by adopting cooperative agreements.
These savings stem from multiple sources. The most obvious is pricing: when you’re negotiating on behalf of thousands of institutions representing billions in spend, suppliers sharpen their pencils. But there’s also significant value in avoiding the cost of running your own RFPs, which results from:
Institutions spend an average of 87 hours on this process, according to NCPP, the professional association for cooperative procurement, with complex projects requiring more than 100 hours. And that’s before you activate contracts. When you multiply that across hundreds of suppliers, the administrative cost is substantial.
So, besides your bottom-line cost savings with cooperative agreements, you get the gift of time to focus on activities that strengthen your institution. Maybe that’s developing a robust supplier diversity program, implementing sustainable sourcing initiatives, or providing strategic guidance to academic departments on complex purchases.
The education sector faces ongoing pressure to do more with less. GPOs provide a proven path to meeting that challenge while maintaining the compliance, quality, and service levels your institution demands. Whether you’re looking at $50,000 in annual savings like WSU or scaling up to half a million like the University of Washington, the impact on your bottom line and your team’s capacity can be significant.
However, not all GPOs are the same. Some are for-profit companies that seek to maximize profits. By contrast, E&I Cooperative Services is nonprofit and member-owned, the only sourcing cooperative exclusively dedicated to serving the education sector. Members play an active role in governance and planning, helping to guide E&I’s mission and share in any proceeds in the form of patronage refunds.
Many of E&I’s procurement professionals came from procurement leadership in higher education, providing expertise and a deep understanding of the unique needs and challenges you face every day.
Discover how E&I Cooperative Services can help your institution achieve measurable cost savings and streamline your procurement. Learn the benefits of membership and browse more than 200 competitively solicited, compliant cooperative contracts designed exclusively for education.