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Tips for Managing the Contract Period for Cooperative Purchasing Contracts Procurement often involves complex negotiations and contracts crafted to comply with a wide variety of laws and regulations. A purchasing cooperative contract in higher ed takes this into account and leverages aggregated buying power to obtain better pricing and more favorable terms.
The contract period for cooperative purchasing varies depending on the agreement and how it is executed. In most cases, this creates a shared responsibility between the institution and the cooperative, working together to ensure suppliers meet their obligations.
In procurement, there are typically two broad types of agreements: goods and services. The contract period for cooperative purchasing varies on a case-by-case basis, as will your usage.
When it comes to buying goods, the contract period for cooperative purchasing is longer. A typical contract period might span five years and lock in terms and conditions for the duration. There may also be additional incentives or price breaks for hitting certain purchasing volumes.
You remain in control during this period, deciding how much to purchase.
With service agreements, the terms and rates are set. You still have to control the contract at the institutional level, managing the day-to-day execution. In many cases, services and fees adjust based on usage—meaning that even if you enter into an agreement, the decision on costs and specific services is still at your discretion. Service periods may be shorter. For example, an agreement for services might span 90 days even though the contract is valid for multiple years. It depends on the level and duration of services provided.
So, even with a long-term agreement in place, your contract period for cooperative purchasing will only span the time you need it.
When evaluating an agreement, here are a few of the key components you need to consider.
For higher education institutions, terms typically range from three to five years, allowing sufficient time to implement programs, realize cost savings, and establish strong supplier relationships.
Tip: Consider aligning these terms with academic cycles and institutional strategic plans to minimize disruption to campus operations.
Strategic renewal options provide flexibility. Many purchasing cooperative contracts in higher ed will include renewal periods. These extensions should be structured to protect both the institution and supplier, with clear performance requirements and market adjustment provisions.
Tip: Check the specific notification periods for exercising renewal options, typically 90–120 days before contract expiration.
Annual reviews are common, with adjustments typically tied to relevant market indices or cost increases. However, with rapidly rising costs over the past few years, we’re seeing more instances where new agreements include multiple options for price resets during the year.
Tip: Look for caps on increases and requirements for supporting documentation to justify any price changes. This helps you budget more effectively while providing suppliers with a reasonable way to approach market shifts.
Technical needs and market conditions can change rapidly—especially when technology is involved. You do not want to get stuck in a contract that does not allow you to evolve as your needs change or new solutions hit the market.
Tip: Evaluate potential purchasing cooperative contracts in higher ed with an eye on the future. Does an agreement allow you to incorporate new technology or alternate materials without requiring a new agreement or a renegotiation?
Whether your contract includes formal reviews or not, it’s a good idea to establish regular performance checkpoints throughout the contract period. These milestones should include specific metrics, reporting requirements, and improvement plans if needed.
Tip: Put a process in place to ensure consistent evaluation across the contract term.
Compliance is essential in higher education, with a growing list of federal, state, local, and institutional regulations and policies that require adherence. You need a standardized way to ensure compliance throughout the contract’s duration.
Tip: Establish a framework for ensuring compliance, including the documentation needed for periodic audits.
While stability is important, you want well-defined exit provisions to protect your interests wherever possible. This should include both convenience and cause termination clauses, specifying notice periods and transition requirements.
Tip: Consider including step-in rights to ensure service continuity. Step-in rights enable you to take over services in case suppliers are unable to perform.
Partnering with a cooperative like E&I Cooperative Services helps you manage the entire procurement process. From sourcing, soliciting, negotiating, and structuring terms, the procurement professionals at E&I Cooperative Services make hundreds of competitively solicited cooperative contracts available to colleges and universities.
This creates a shared management process. While E&I Cooperative Services controls the rates and negotiation periods, schools manage the execution and performance.
View available contracts at E&I Cooperative Services and learn more about the benefits of membership.
