Business (Managing K-12 Education)

Smart Buy

School districts can, of course, be huge or tiny. The City School District of the City of New York, as the largest public-school system in the country is formally called, has more than 1,800 K-12 schools. The Los Angeles Unified School District has more than 1,000 schools. Then again, the smallest districts have as few as two schools.

Big or small, school districts must purchase services and supplies. As you know, districts set budgets in advance of the school year based on the needs catalogued by the various departments: academics, athletics, technology, transportation, and so on.

According to Sue Peters, director K-12 market development with E&I Cooperative Services, most districts operate their procurement functions through finance departments. Perhaps 40 percent of school districts utilize their operations departments for procurement.

Districts purchasing needs may include transportation products and services, technology, janitorial, maintenance, operational supplies, and, of course, textbooks, paper, pencils, and other educational supplies.

Founded in 1934, a member owned, non-profit purchasing cooperative focused entirely on K-12 and higher education, E&I Cooperative Services was created by a group of K-12 schools interested in holding down prices for supplies of all kinds.

While E&I is an age-old K-12 coop, observers note that there has been a tremendous expansion of cooperatives over the past 20 years or so, again, of course, for the purpose of holding down prices.

Even so, today’s coops come in various sizes and shapes. They may be for-profit or non-profit, for instance. And they may focus on widely divergent product categories including science, athletics, technology, transportation (school buses, for instance), maintenance, and operations.

Cooperatives develop portfolios of contracts with attractive prices for members by taking on all of the onerous tasks that no one, including school purchasing agents, likes to do: They survey the needs of members, develop and circulate requests for proposals (RFPs) to suppliers. Cooperatives then evaluate the responses and award contracts to vendors returning the most responsive proposals. Typically, cooperatives try to award contracts to suppliers offering the best prices for quality products. Given that low prices sometimes sacrifice quality, the best buying decisions judge both quality and price.

Services are part of the mix, as well. “For example, a district may adopt our agreement with an elevator company regarding ongoing maintenance,” Peters says. “Of course, particular institutions may have their own expectations related to levels of service and various terms and conditions, and they may negotiate with their cooperative based on those protocols.”

As always, Amazon has dealt itself into the business offering cooperative level prices to all kinds of businesses as well as to K-12 schools. Included in the Amazon mix are analytics and customizable reports that can help buyers, such as school districts, improve financial efficiency.

Can a school district purchasing manager negotiate further with venders’ offerings to cooperatives? “Once a contract is adopted,” says Peters, “the district works with the contractor (or supplier) to set terms and conditions. For instance, the contract might be awarded with a pricing schedule that specifies prices that are not to be exceeded.”

How might that work? A school district purchasing manager may adopt a cooperative’s agreement with an elevator company regarding continuing maintenance, continues Peters.

Is there room to negotiate within that framework? Perhaps. A school purchasing agent can always give it a go.

However, observers note that individual districts also have their own policies and requirements regarding levels of service and terms and conditions. As such, they may want to amend or add provisions to their cooperative master agreements. That, of course, will involve negotiations between the parties.

Peters also notes that purchasing decisions by districts must also abide by district as well as state procurement rules. “For example, some states may designate a dollar threshold that requires purchasing agents to conduct a competitive selection process.”

Where does the purchasing function stand within the organization of a school district? “It usually depends upon the size of the district,” Peters says. “I would say that the largest 1,000 school districts in the U.S. have formal purchasing resources, including procurement officers, in place in their financial departments. Smaller districts might run purchasing decisions through their business offices.”

In the end, effective cooperative purchasing policies and procedures can help school district purchasing managers to use their always scarce financial resources as efficiently as possible—to the benefit of the faculty and, most importantly, the students.