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Academic institutions must meet complex and often overlapping needs while navigating a maze of regulations, initiatives, compliance requirements, and budget constraints.
Procurement professionals can sometimes feel like that mouse running a maze, constantly hitting dead ends and having to circle back to find a better pathway. Then, just when the end is in sight, challenges like supplier performance issues, supply chain disruptions, or additional budget cuts pop up, forcing you to pivot and start the search again.
Whether you’re in a large school with a dedicated team of procurement pros or a smaller college that handles procurement through its finance team, the job is complex, and it grows more challenging every day.
Cooperative agreements can eliminate many of the roadblocks, helping you sort through compliance requirements and find the best route, saving time and money.
A cooperative agreement is generally a long-term agreement whereby multiple academic institutions can leverage their collective purchasing power.
For example, E&I Cooperative Services aggregates purchasing power and negotiates on behalf of its more than 6,000 member institutions. As the only member-owned nonprofit sourcing cooperative that exclusively serves the education sector, E&I has deep insight into the complexities involved in higher-ed procurement to help maze runners reach their goal more quickly and at a lower cost.
Higher ed cooperative agreements solve complex procurement problems in several key ways.
Procurement teams in higher education face various risks that can disrupt operations. Some common risks include:
What is a cooperative purchasing agreement? It’s an effective tool for mitigating these risks. By joining a cooperative, you get access to a network of top-tier suppliers who have already been evaluated for reliability and performance. This reduces risk. In case of supply chain problems, you can also find alternate sources through the cooperative, like E&I, to avoid shortages.
Terms and conditions negotiated on behalf of cooperative members are clear, including price escalations, so you can budget more effectively to further limit your risk of budget overruns.
Ensuring compliance with an evolving set of regulations is time-consuming, especially for procurement teams that are balancing a long list of suppliers and contracts. Cooperative agreements offer a streamlined approach to compliance.
These agreements are designed to meet federal and state requirements, as well as institutional policies. Cooperative agreements also simplify the audit and monitoring process. Institutions can rely on the cooperative’s procurement team to handle the audit trail and help monitor performance.
Procurement teams also have to manage diverse supply chains stretching across departmental and geographical boundaries.
Cooperative agreements help here too. Because these agreements represent multiple academic institutions, they are high-priority for suppliers. This produces collective buying power and also provides significant incentives for suppliers to fulfill these agreements. This might mean getting deliveries faster or more reliable service even when there are supply chain hurdles.
A well-managed portfolio allows you to aggregate purchases, identify cost-saving opportunities, and optimize spending across departments. By bringing more contracts under control, and more goods or services under contract, procurement teams can take advantage of economies of scale, further driving down costs.
By using data analytics, procurement teams can monitor and optimize their procurement portfolio. This data-driven approach ensures that procurement decisions are informed by actual spending patterns, helping to avoid overpaying for goods and services.
E&I Cooperative Services offers members the opportunity to participate in a Strategic Spend Assessment. This no-cost assessment compares an institution’s spend against E&I’s cooperative contract portfolio to highlight savings opportunities that can be unlocked through participation in these agreements.
Beyond cost savings, cooperative agreements offer other financial benefits for higher education institutions.
By participating in these agreements, procurement teams can improve budget predictability and reduce procurement expenses. Because cooperative agreements lock in favorable pricing and terms, institutions can better forecast their procurement expenditures, reducing the likelihood of budget overruns.
Cooperative agreements also support a long-term savings strategy. With stable, negotiated pricing and established relationships with suppliers, you can minimize the risk of price volatility. Although most contracts today include price escalation clauses or price resets, the timing of these is clearly defined to make forecasting easier.
We don’t really mean to compare procurement teams to rats running a maze, but it likely feels that way at times. Higher education cooperative agreements are a powerful tool to navigate complex procurement problems and deliver the results you need—reducing roadblocks and clearing pathways to compliance.
Contact E&I Cooperative Services for more ways to streamline operations and achieve significant cost savings.
