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While the amount varies from year to year, the Department of Education gives colleges and universities about $52 billion in grants annually, not including money for student financial aid. These grants typically come with complex regulations about how they are spent.
Purchasing cooperatives in education can be a key resource for procurement teams in maximizing value from federal grants by leveraging a national procurement strategy for competitive sourcing.
Federal grants play a vital role in educational initiatives across the United States. These grants come in various forms, including formula grants and competitive grants. While these grants provide crucial resources, they often come with restrictions.
Procurement teams must adhere to the guidelines on how funds can be used, maintain detailed records, and ensure compliance with federal regulations. There may also be deadline pressure to use funds within a specified timeframe, adding additional stress to procurement teams that are already juggling projects.
A persistent myth is that cooperative contracts cannot be used with federal grants. This misconception likely stems from a misunderstanding of federal regulations and an abundance of caution in grant management. However, this is not true.
Federal regulations in the Code of Federal Regulations (2 CFR 200) authorize and encourage the use of cooperative agreements as long as they meet certain criteria:
Procurement teams can leverage purchasing cooperatives in education to take advantage of a national procurement strategy while still maintaining local control.
Cooperatives put out RFPs across the country, competitively soliciting and sourcing qualified suppliers. With E&I Cooperative Services, for example, strategic advisory board members participate in the RFP process and provide insight into what member institutions need. When contracts are negotiated, individual schools benefit from volume discount pricing while maintaining autonomy about using these contracts. Colleges and universities can choose to opt in or use a cooperative contract to negotiate additional terms and conditions.
For example, you can work with national or Tier-1 suppliers to direct fulfillment to local or diverse suppliers or lock in pricing while making separate decisions on goods and services that apply to your school.
Some grants have detailed technical specifications. This can restrict the number of available suppliers that can meet the criteria, especially at the local or regional level. A national procurement strategy using a group purchasing organization focusing on education can uncover suppliers that meet these standards to broaden the supplier pool and offer competitive pricing.
Grants often impose maximum spending limits on categories like equipment or personnel costs for services. National sourcing, with the volume of multiple member institutions, significantly increases your odds of finding suppliers that can deliver what you need without going over budget amounts.
Overlooking cooperative purchasing for federal grants means missing out on significant opportunities to control costs and tap into discounts. Studies show that colleges and universities can save from 5% to 25% on common purchases when partnering with cooperatives. This can translate into millions of dollars in savings that can be directed to other critical educational needs.
E&I Cooperative Services is a non-profit member-owned organization that focuses solely on the education sector. With deep category expertise and guidance from member institutions, E&I aggregates spend across members to negotiate more favorable terms and pricing than most schools can negotiate on their own. This helps procurement teams accelerate purchasing, remain compliant with the conditions associated with federal grants, and reduce expenses—maximizing the school’s grant money.
Schools also benefit in several other ways, including reduced administrative overhead and better resource allocation. At the same time, they get access to a broader range of suppliers, including those that might not respond to an RFP for an individual school.
As colleges and universities face increasing pressure to control costs due to budgetary constraints and rising prices, purchasing cooperatives in education are an optimal way to employ fiscal responsibility. You can streamline the procurement process and ensure you maximize every dollar of your federal grants.
Contact E&I Cooperative Services to learn more about how cooperative contracts can stretch your federal grant dollars and maintain tight cost control.
