Leveraging Purchasing Cooperatives to Streamline Sole Source Procurement

Sole source procurement poses unique challenges in the education sector. When one supplier can provide a specific product or service, it can make procurement more challenging to negotiate favorable terms and justify the decision to comply with procurement policies.

Because goods or services are only available from one supplier, procurement takes place without a competitive bidding or solicitation process. This occurs typically when there is only one vendor that can meet specific requirements or has exclusive rights or technology that cannot be provided by other companies, such as certain instruction materials, textbooks, or software.

Leveraging a purchase cooperative can help streamline the process.

Benefits of Purchasing Cooperatives

Purchasing cooperatives aggregate the purchasing power of multiple institutions to negotiate better pricing and terms with suppliers. For sole source procurement, this can provide greater leverage to negotiate more favorable terms than an individual educational institution could on its own. This can create significant price breaks due to increased volume.

Cooperatives also negotiate contracts with suppliers to streamline the procurement process. Rather than having to negotiate deals individually, a purchasing cooperative makes ready-to-use contracts available. Contracts will comply with relevant regulations and policies as well, alleviating some of the burden on individual academic facilities to ensure compliance.

Another benefit of working with a purchasing cooperative is that they have a broad range of contracts from suppliers. In some cases, you may be able to find alternatives that would not have otherwise been uncovered. When joining a purchasing cooperative, you are resourcing your procurement team with added experts who can help you navigate their contracts.

Typical Use Cases for Sole Source Procurement

Here are a few of the circumstances that may justify sole-source procurement in educational facilities rather than traditional competitive solicitation:

• Equipment for which there is no comparable competitive product available in the market.
• Proprietary components, replacement parts, or supplies that can only be obtained from the original manufacturer or its authorized distributors due to a lack of commercially available substitutes.
• Software enhancements or upgrades required for compatibility and seamless integration with an existing system, where the overriding consideration is maintaining continuity and functionality.
• Specialized supplies, equipment, parts, or services necessary for ensuring the fairness, validity, and integrity of scientific research studies.
• Repair or replacement parts specifically designed for non-competitive equipment where no alternative sources exist.
• Contract extensions or renewals for closely related work where transitioning to a new contractor would not be feasible or cost-effective due to the intrinsic connection with the previously uncompleted contract.

Sole Source Procurement—Best Practices

Before authorizing a sole source for purchasing, there are several best practices that academic institutions need to implement.

Develop a Formal Sole Source Procurement Policy

If you do not already have guidelines and procedures for sole source procurement, you need to establish the criteria for when such procurement is appropriate. This should include the required documentation and justification.

While different educational institutions will have their own requirements, there are some common guidelines. For example, schools often include policies such as documentation of a good faith effort to locate alternative sources and a detailed list of the unique specifications required.

Typically, sole-source procurement cannot be based solely on quality. If purchases are made to ensure compatibility with existing equipment, and items are only available for one provider, justifications may need to document prior purchases to demonstrate the need. In most cases, sole source statements must be written by the procurement team and not by the supplier.

A good justification policy should answer three basic questions:

1. What are the unique requirements that must be met?
2. Why is this the only supplier that meets these requirements?
3. How do you know there are no other solutions available?

There may also be separate sets of compliance policies depending on whether a purchase is federally funded or non-federally funded.

Institute a Formal Review and Approval Process

There should be a formal review and approval policy. You’ll want to have a clear audit trail to ensure compliance with institutional policies, with the appropriate approvals in place in case purchases are ever questioned.

Training and Education

Staff needs to understand when sole source procurement is allowed and the process for initiating purchases. Procurement teams should also be trained on the role of purchasing cooperatives and when they can be used as well.

E&I Cooperative Services is the only non-profit member-owned purchasing cooperative that focuses solely on the education sector. Leveraging the bulk buying power of 6,000 member institutions, E&I’s competitively solicited contracts provide best-in-class pricing and favorable terms that meet the unique requirements of the education sector.

Comply with sole source requirements, streamline the purchasing process, and save money. View available contracts at E&I Cooperative Services.