Business Practices (Achieving Administrative Excellence)
Smart Buying
- By Michael Fickes
- 11/01/18
Colleges and universities can, of course, be huge or tiny. The largest university in the U.S. is the University of Central Florida in Orlando with 66,183 students and a main campus spanning 1,415 acres. The smallest colleges in the U.S. serve 50 to 500 students and occupy only a few acres.
Big or small, colleges and universities must purchase services and supplies, a process that begins by setting budgets based on the needs catalogued by the multitude of institutional departments: the various academic departments, athletics, technology, and so on.
Specific purchasing needs may include a variety of products and services including technology, janitorial, maintenance, operational supplies, and, of course, textbooks, paper, pens, pencils, and other educational supplies.
According to Sue Peters, a director with E&I Cooperative Services, many colleges handle buying through procurement departments.
Cooperatives for Purchasing Power
E&I Cooperative Services was founded in 1934 by a group of educators interested in holding down prices for educational supplies. It was and remains organized as a member-owned, nonprofit purchasing cooperative focused on K–12 and higher education.
While the E&I co-op has been around for many years, 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 co-ops come in various sizes and shapes. They may be for-profit or nonprofit, for instance. They may be regional or national. And they may focus on widely divergent product categories including science, athletics, technology, transportation, and 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 college and university purchasing agents, likes to do: Cooperatives survey the needs of members and develop requests for proposals (RFPs). The co-ops then evaluate the responses as they are returned and award contracts to vendors that submitted 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 and make awards to vendors offering the best balance between the two.
Services are part of the mix, as well. On a higher education campuses, these services may include, but not be limited to maintenance, security, retail, and food service operations. “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.”
Another Option Added to the Mix
As may be expected, Amazon has dealt itself into the business, offering cooperative-level prices to all kinds of businesses as well as to colleges and universities. Included in the Amazon mix are analytics and customizable reports that can help buyers improve and maintain financial efficiencies.
Can college and university purchasing managers negotiate further with vendors’ offerings to cooperatives? “Once a contract is adopted,” says Peters, “the school can work 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 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 purchasing agent can always give it a go.
However, observers note that individual schools 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.
Where does the purchasing function stand within a college or university organization? Observers say that larger schools may have formal purchasing resources, including procurement officers working through financial departments. Smaller schools might handle purchasing through their business offices.
In the end, effective cooperative purchasing policies and procedures can help college and university purchasing managers to use their always limited financial resources as efficiently as possible—to the benefit of the administration, faculty and, most importantly, students.