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Cooperative purchasing organizations play an increasing role in helping academic institutions meet their procurement goals, optimizing purchasing, keeping costs in check, and meeting internal goals. However, there remains a misconception about the legality of their use, particularly regarding competitive solicitation and bidding requirements.
So, let’s take a look at the legal framework of education purchasing through cooperative purchasing organizations and dispel this myth.
While you should always check with your legal counsel, the short answer is “yes” in almost all cases. Despite that, some people still have a misperception about how cooperative purchasing works, most likely because of the complexity of state and federal laws governing public procurement.
Most states have specific laws and regulations that explicitly allow for cooperative purchasing. These laws typically:
For example, many states have adopted legislation similar to the American Bar Association’s Model Procurement Code, which includes provisions for cooperative purchasing.
Nationally, cooperative education purchasing is not just legal—it’s encouraged. The Education Department General Administrative Regulations (EDGAR) explicitly permit educational institutions to use cooperative purchasing agreements that comply with procurement standards.
There are some key differences between public and private schools. Public schools are subject to state and federal procurement laws and may need to demonstrate that cooperative contracts meet their procurement requirements.
Private schools generally have more flexibility, as they are not typically bound by the same procurement restrictions as public institutions. This can simplify the process.
In many cases, cooperative purchasing organizations meet or even exceed competitive solicitation and bidding requirements. For example, E&I Cooperative Services negotiates cooperative contracts after a rigorous competitive solicitation process that complies with most state and federal regulations. This includes public solicitation and a mandatory submission period of no less than 30 days to provide ample time for suppliers to respond to RFPs. Multiple bids are evaluated and negotiated on behalf of member institutions, which have the option to opt-in to cooperative contracts.
Schools can typically satisfy their own sourcing requirements while benefiting from volume discounts offered by cooperative education purchasing contracts.
When using federal funds, educational institutions must comply with federal procurement standards. The Uniform Guidance (2 CFR 200) outlines the requirements for procurements made with federal funds, including those through cooperative purchasing. Institutions must ensure that cooperative purchasing organizations meet these federal standards. State or local funds are governed by state or local laws.
Grants and donations may come with stipulations about procurement and spending, and you will need to comply with any restrictions to accept funding. Purchases made with private funds typically have more flexibility, although they may be earmarked for specific purchases.
Educational institutions should review federal, state, and local laws governing cooperative purchasing and ensure that cooperative purchasing organizations follow proper guidelines before entering into any cooperative contracts. Schools should also ensure that contracts align with institutional guidelines for ethical procurement and meet goals for initiatives such as diversity of suppliers or sustainability.
Before joining a group purchasing organization (GPO) or a cooperative purchasing organization, academic institutions should have a clear understanding of policies and processes to avoid legal concerns. As always, schools should check with their legal counsel.
Cooperative purchasing is not only legal, but it is also a valuable tool for schools to optimize their procurement. Cooperative contracts typically produce significant cost savings via volume discounts, which schools may not be able to secure on their own.
As a member of E&I Cooperative Services, you get access to hundreds of competitively solicited contracts. There is no membership fee and no obligation to use any of the contracts. You can opt in at your discretion, saving time and money while still meeting state and federal requirements for procurement.
E&I Cooperative Services is the only non-profit member-owned sourcing cooperative that focuses solely on the education sector. Learn more by visiting www.eandi.org or viewing the currently available contracts on our website.
