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Procurement professionals in higher education face big challenges these days. For large institutions, there is significant pressure to reduce expenses despite rising prices. In smaller institutions, there’s often an overwhelming amount of work for a limited staff. For both, staffing shortages are increasing everyone’s workload.
An efficient RFP contract process, coupled with the strategic use of group purchasing organizations (GPOs), can help streamline the procurement process.
RFP contracts are the result of a formal invitation to suppliers to submit bids for specific goods or services.
RFP contracts are particularly valuable due to the diverse and often complex needs of educational institutions. From laboratory equipment and IT infrastructure to food services and facility maintenance, the scope of procurement in higher education is vast and varied.
The benefits of strong contracts are significant, including:
The key to streamlining procurement in higher education is standardizing your process. Standardized templates for common RFP contracts will save you time and produce consistency, making it easier to compare and review submissions.
Here are five specific strategies for crafting RFPs:
Clearly define your needs, expectations, and evaluation criteria. This helps vendors provide more accurate and relevant proposals. This should include educating suppliers about your requirements and submission process.
Involve stakeholders from various departments in the RFP development process to ensure all needs are addressed. This also helps with buy-in from stakeholders to follow procedures and reduce non-compliant spending.
Where possible, leverage digital tools for RFP submission and evaluation to streamline the process and reduce paperwork.
You will want a standardized rubric for evaluating RFPs as well. This is increasingly important as procurement teams often have to balance a growing list of initiatives that extend beyond simple pricing. Supplier diversity, sustainability, and social responsibility must all be weighed appropriately, along with total lifecycle costs.
Colleges and universities should identify potential risks associated with procurement activities and transfer risk in RFP contracts to suppliers wherever possible. Procurement teams should develop contingency plans in case suppliers are unable to deliver.
Despite negotiating RFP contracts, disruptions to supply chains and global events may prevent suppliers from fulfilling their obligations. Unfortunately, we have seen examples of this over the past few years. Colleges and universities need backup plans to overcome shortages of critical supplies.
While an RFP contract solicits competitive bidding, the process is time-consuming—which can be challenging for procurement teams that have a long list of items to acquire. GPOs are powerful partners in higher education procurement, reducing the workload and delivering significant cost savings.
By participating with GPOs, colleges, and universities can leverage pre-negotiated contracts that take advantage of collective buying power. By combining purchasing across academic institutions, GPOs negotiate deeper discounts and more favorable terms that most colleges or universities can negotiate on their own.
These volume discounts can be significant and applied across a broad section of procurement needs. Because of the volume of deals, GPOs also have deep market intelligence and benchmarking data to ensure fair market pricing.
GPOs handle the RFP, solicitation, review, and negotiation process. This frees up procurement teams to spend more time on analysis rather than crafting RFP contracts.
Many schools use both RFPs and GPOs effectively. RFPs are most effective for unique or institution-specific requirements. GPOs are the most efficient solution for standardized services or frequently purchased items. In both cases, you can use GPO contracts to benchmark prices for your suppliers.
Combining these two procurement strategies can make a big difference in your procurement process.
Contact E&I Cooperative Services, the only non-profit, member-owned sourcing cooperative focused exclusively on education. Leveraging the collective purchasing power of 6,000 member institutions, E&I Cooperative Services’ member-driven competitive solicitation process results in significant savings. View available contracts.
