To say things are changing in today’s higher education environment is a massive understatement. Every day, it seems like there’s a new challenge over funding and fundraising, financial aid, endowments, enrollment, and more.
Inside Higher Ed’s 2025 Survey of College and University Presidents put it into perspective. While 87% of those surveyed are confident in their institution’s financial stability over the next five years, nearly 20% say they’ve had serious discussion about merging or making substantive changes to operations. Overall, 56% of college and university presidents believe the second Trump administration will have a somewhat or significantly negative impact, especially when it comes to their financial outlook.
Procurement and finance teams are under the microscope these days and expected to take on a more strategic role. Forget transactional purchasing where lower costs were the only goal. Today’s procurement leaders must reduce risk, ensure compliance, and find innovative solutions to support institutional goals while also delivering cost savings.
It’s a tall order.
Procurement teams that rise to the challenge will have a greater impact on their institutions and solidify their representation as leaders rather than buyers. However, things will have to change.
Group purchasing organizations (GPOs) are playing an increasing role in higher ed procurement, producing instant savings in some areas and reducing administrative overhead. This empowers procurement teams to spend more time on the strategy to overcome today’s (and tomorrow’s) challenges.
Let’s get some of the basics out of the way…
Group purchasing is a procurement strategy where institutions consolidate their purchasing power to negotiate better pricing, terms, and service levels from suppliers. By aggregating demand across institutions, group purchasing helps participants access economies of scale that could not be achieved independently.
In higher education, group purchasing is particularly useful for managing a wide array of indirect and direct spend categories across departments.
What is a GPO? A group purchasing organization is a group that leverages the collective buying power of members to secure favorable contracts with suppliers.
GPOs handle the entire contract lifecycle, including market research, RFP development, competitive solicitation, evaluation, negotiation, and ongoing supplier management. They may be for-profit, nonprofit, industry-specific, or general use. GPO programs offer access to pre-negotiated contracts, reducing administrative overhead and ensuring consistent supplier performance.
A GPO contract is a pre-negotiated agreement between a GPO and a supplier, made available to the GPO’s member institutions. These contracts are designed to be compliant with public procurement laws, competitively solicited, and easy to adopt.
They often include value-added services, favorable pricing tiers, performance standards, and reporting tools. Institutions can typically opt in to these contracts with minimal administrative burden.
GPO programs offer a range of benefits, starting with cost savings. It’s common to reduce spend by 10% to 15% when adopting cooperative agreements. One analysis showed Washington State University (WSU) could save $50,000 annually with GPO programs. A larger institution like the University of Washington, however, forecast savings at nearly that much every month, shaving between $400,000 and $500,000 off its spend by leverage cooperative agreements.
While the largest institutions see the greatest savings, even the smallest colleges will benefit from GPO programs.
Other benefits include:
When integrated effectively, GPO programs help procurement teams focus more on strategic value.
Higher education institutions face unique procurement challenges, from grant compliance and public accountability to the need for flexible, scalable solutions across diverse departments. Not all GPOs have the experience or knowledge to meet the unique needs of higher education.
An education-focused GPO like E&I Cooperative Services offers key advantages for academic institutions, including:
GPO contracts should not operate in a silo.
Instead, they should be integrated into your institution’s procurement playbook. This means aligning them with category strategies, sourcing calendars, stakeholder needs, and broader financial goals.
Procurement leaders should view GPO provisions as a complement to internal sourcing, and not a replacement. For high-spend, high-risk categories, a custom RFP may still be appropriate. However, there may already be a cooperative agreement that provides access to lower costs, so it’s worth checking. For common goods and services like office supplies, basic furniture, food services, or jan/san, GPO contracts offer speed and consistency along with savings.
Institutions can embed GPO resources into procurement planning, ensuring cooperative contracts are evaluated alongside internal benchmarks for total cost of ownership (TCO), supplier diversity, and user satisfaction.
GPO participation enhances procurement agility.
Category management is an increasingly essential practice for higher ed procurement teams seeking to manage complex spend portfolios. GPOs can play a central role by providing pre-sourced options across strategic categories, data analytics to support decision-making, and supplier consolidation strategies.
Through customized punch-out catalogs of preferred suppliers and products, procurement teams can reduce maverick spending. This can result in significant savings. Rogue spending in many institutions eats up 10% to 20% of budgets. If a university is spending $100 million annually on procurement, off-policy spend can equal $10 to $20 million a year and a potential loss of millions of dollars in negotiated savings.
Deloitte’s 2025 Higher Education Trends concluded that “The risks colleges and universities face today are numerous, driven by factors like demographics, economics, politics, regulations, and technologies. Even well-funded institutions are challenged, let alone those struggling to stay afloat.”
Mitigating risk must be a top priority. While you can’t control which new government policies will impact your institution or general economic conditions, you can reduce risk with GPO contracts. These contracts typically span three to five years or longer and represent a substantial piece of business for suppliers. Because of the amount of money involved, academic institutions are more likely to get a higher quality of service, more responsive service, and a more resilient solution.
At the same time, procurement teams should review a GPO’s contract governance framework carefully. Does the GPO evaluate supplier financials, conduct performance audits, and maintain cybersecurity protocols? Are indemnity and liability clauses aligned with your institution’s risk tolerance?
Understanding the GPO’s sourcing methodology, member input process, and review cycle is essential to ensure it meets your governance standards and audit-readiness requirements.
Your engagement with a GPO should deliver measurable outcomes. Procurement leaders must track key performance indicators (KPIs) such as cost savings, contract adoption rates, supplier diversity, and user satisfaction to evaluate GPO effectiveness. These insights can support budget planning, strategic sourcing, and continuous improvement.
Institutions should define ROI metrics during GPO onboarding and evaluate them regularly to ensure they get the value they need. Integrating GPO data into ERP or spend analysis tools can simplify evaluation and provide a unified view of the strategic contribution.
Procurement has become a key lever for supporting institutional mission, whether advancing sustainability goals, promoting equity, or fulfilling other initiatives. GPOs can help align purchasing with these values by sourcing from environmentally responsible suppliers, certified-diverse suppliers, or other targeted suppliers to meet your goals.
E&I includes social responsibility in its contract evaluation criteria. This allows you to pursue mission-driven goals without compromising on price or compliance. Most suppliers in cooperative agreements can also provide the documentation you need to quantify the social and environmental impact of institutional spend.
Even though higher education is now in a constant state of change, implementing change successfully isn’t easy. Old habits die hard, but today’s environment demands new approaches.
Successful GPO adoption depends on stakeholder engagement. Procurement teams must collaborate with IT, research, facilities, and auxiliary services to truly understand department needs and promote the value of GPO contracts. This requires a mix of education, communication, and responsiveness.
Cross-departmental coordination also helps identify opportunities to consolidate spend and reduce contract duplication—key to keeping costs under control.
GPOs help improve compliance rates by bringing more spend under contract. For example, customized catalogs as part of an eProcurement platform highlighting preferred suppliers under contract can focus purchasing efforts. Even with decentralized purchasing, you can implement centralized control.
One misconception is that GPO contracts are rigid. In reality, many GPOs allow for institution-specific customization, such as adjusting service-level agreements, delivery terms, or pricing tiers.
Procurement teams should work closely with GPO account managers to adapt contracts to campus needs to drive greater value. For example, some suppliers will allow you to tailor contracts to include diverse Tier 2 or Tier 3 suppliers to meet institutional goals. In some cases, cooperative contracts help you avoid upcharges for such requests when utilizing a cooperative agreement.
One of the most valuable, yet underutilized, aspects of GPO membership is peer collaboration. When you can interact with your peers and compare pricing options, supplier performance, and best practices, you can learn from each other.
E&I’s EdProHub, for example, is an online community to connect, share knowledge, and support the education procurement community.
As a member-owned organization, E&I is highly responsive to member needs. Advisory boards made up of members play an active role in the organization’s direction and in shaping sourcing for future goods and services.
E&I Cooperative Services is the only member-owned nonprofit sourcing cooperative focused exclusively on the education sector. With decades of experience serving higher education institutions, E&I understands the unique compliance, governance, and academic priorities that shape procurement decisions.
Unlike general-use or for-profit GPOs, E&I operates with a mission-driven model, reinvesting resources into member services and offering collaborative platforms that support benchmarking, peer learning, and contract innovation. Members have a voice in sourcing and benefit from transparent contract development, supplier diversity initiatives, and deep education-specific expertise.
How does a GPO save my institution money?
By aggregating demand across member institutions, GPOs negotiate better pricing and terms than most institutions could achieve independently.
Can I still negotiate my own contracts if I use a GPO?
Yes. GPO participation is not exclusive. Institutions can choose when to use a GPO contract versus running their own RFP.
Do GPOs limit supplier diversity or innovation?
Many GPOs, including E&I, emphasize supplier diversity and work with a wide range of suppliers including certified minority- and women-owned businesses.
Can I customize a GPO contract to fit my institution’s needs?
Yes. Many cooperative agreements allow institutions to modify elements like delivery terms, SLAs, and reporting requirements. Contract flexibility is often built into the agreement.
What makes an education-specific GPO better than a general-use one?
Education-specific GPOs like E&I understand the compliance, budgeting, and governance realities of academic institutions. They tailor contracts, timelines, and services to the academic environment and provide forums for collaboration and professional development.
Is there a cost to join E&I?
E&I Cooperative Services does not charge membership fees or require participation thresholds. Members can actually generate revenue with an E&I membership in the form of patronage refunds based on annual purchase volume.
E&I’s comprehensive GPO programs are designed to support smarter procurement strategies grounded in category management, cost savings, and institutional alignment. Connect with your E&I representative today to discover how we can help your college or university drive strategic value through group purchasing and unlock member-exclusive benefits.
