As budgets get tighter and demands get higher, procurement teams are looking for innovative ways to streamline their process, comply with legal requirements and school initiatives, and control costs. Today, more schools, colleges, and universities are turning to
purchasing cooperatives to leverage their massive buying power to negotiate better deals.
Using cooperative contracts absorbs much of the administrative burden of sourcing suppliers, issuing
RFPs, and evaluating multiple proposals, and because group purchasing organizations (GPOs) put out solicitations representing larger buys, there are typically more significant volume discounts and access to more suppliers.
However, there are a few myths about purchasing cooperatives, especially when it comes to the solicitation and bidding process.
Common Myths about Purchasing with Cooperative Contracts
So, let’s dive into three of the most common myths.
Myth 1: Cooperative Contracts Bypass the Bid Process
Reality: Purchasing coops use a competitive bidding process.
One of the most persistent myths about cooperative contracts is that they allow institutions to sidestep the bid process entirely. This is simply not true.
Cooperative contracts are, in fact, the result of a rigorous competitive process that typically follows steps such as:
- Request for Proposal (RFP): In consultation with its members, purchasing coops issue RFPs, just as you would in traditional bidding. The RFP outlines the specific needs and requirements of the participating institutions.
- Competitive Solicitation: Suppliers submit their proposals in response to the RFP. These proposals are evaluated based on various criteria, including price, quality, and service.
- Award Process: After careful evaluation, the contract is awarded to the suppliers that best meet the specified criteria.
This procurement process ensures that cooperative contracts comply with most state and federal regulations while offering efficiency and value to institutions that choose to opt in.
Want to learn more about the powerful relationship between cooperative buying and higher education procurement? Listen to this episode of E&I’s Cooperatively Speaking podcast!
Myth 2: Purchasing Cooperatives Do Not Include Diverse Suppliers
Reality: Cooperative contracts can provide greater access to certified diverse suppliers.
Contrary to the belief that cooperative contracts limit options,
purchasing cooperatives actively work to include a diverse range of suppliers. These organizations often have the resources and reach to identify and onboard
certified diverse suppliers more effectively than individual institutions might be able to on their own.
By participating in cooperative contracts, institutions can often gain access to a pre-vetted pool of diverse suppliers, including minority-owned, women-owned, veteran-owned, LGBTQ+-owned, and small businesses. This can help you meet your supplier diversity goals more efficiently while still benefiting from the competitive pricing and terms of cooperative contracts.
Myth 3: Suppliers and Contractors Prefer the Bid Process
Reality: Suppliers often prefer working with purchasing cooperatives.
While it might seem that suppliers would prefer the traditional bid process, many find significant advantages in working with purchasing cooperatives. Here’s why:
- Larger Buying Pool: Cooperative contracts represent the combined purchasing power of multiple institutions, often resulting in more lucrative contracts for suppliers.
- More Efficient Sales Process: Instead of responding to multiple RFPs from individual institutions, suppliers can focus their efforts on a single, comprehensive proposal to the purchasing cooperative.
- Broader Market Access: Cooperative contracts can give suppliers exposure to a wider range of potential customers, including institutions they might not have reached otherwise.
- Long-term Relationships: Cooperative contracts often have longer terms, allowing suppliers to build lasting relationships with multiple institutions at the same time.
These factors can make cooperative contracts an attractive option for suppliers, potentially resulting in better pricing and terms for participating institutions.
Best Practices for Leveraging Cooperative Contracts
To leverage the full potential of cooperative contracts, procurement leaders should adopt a strategic approach.
Begin by developing a comprehensive policy that outlines when and how to use these contracts. This foundation enables you to conduct regular market research, ensuring you stay on top of available options and competitive rates.
It is a good idea to engage various stakeholders throughout the process to align contracts with specific needs. As with traditional procurement, ongoing performance monitoring is also essential. By balancing cooperative contracts with other procurement methods, you can maintain a competitive supplier base.
Become a Member of E&I Cooperative Services
E&I Cooperative Services is the only member-owned non-profit organization that focuses exclusively on education. Members play an active role in defining needs, enabling E&I’s education procurement specialists to create RFPs that meet institutional objectives.
A competitive solicitation process, skilled negotiation, and aggregated purchasing power produce significant savings and reduce the administrative overhead for procurement teams.
To get an idea of what goods and services are available, view cooperative contracts on the E&I Cooperative Services website or call the procurement experts at (800) 283-2634 to discuss your needs. 
