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As colleges and universities struggle with financial stress and budget challenges, there is mounting pressure on procurement teams to find innovative ways to lower costs. As many schools have cut programs and staff, there are few obvious answers left when it comes to cost control.
Higher education institutions are turning inward, taking a more critical look at procurement and examining processes to streamline purchasing and reduce administrative overhead. One area that is under the microscope is solicitation. In this guide, we will answer the question, “What is solicitation in procurement?” and examine the different methods of solicitation in procurement and how schools are using cooperative contracts to ease their workload and lower costs.
Solicitation in procurement is the formal process of requesting information, proposals, bids, or quotes from prospective suppliers. This stage of the procurement cycle enables colleges and universities to define their needs and get competitive offers from suppliers that can meet these needs.
With well-crafted solicitations, academic institutions can ensure transparency and fairness in their procurement. With well-defined requirements, institutions can attract potential suppliers and make better decisions about the purchase of goods and services.
There are several methods of solicitation in procurement. Which one is right for you will depend on the types of goods and services you plan to purchase and the complexity of the deal. Here are the most common methods used in higher education.
An RFP is typically used when an institution seeks innovative solutions or when the requirements are complex and cannot be easily defined. This allows suppliers to propose unique approaches to meet the institution’s needs. RFPs are ideal for procuring services, complex systems, or when the best solution is not immediately apparent.
RFQs are used for simpler, lower-value purchases where the institution seeks quick price comparisons from multiple vendors for specific items or services. RFQs are most suitable for off-the-shelf products or routine services.
Some schools call this a Request for Qualifications and Quotation (RFQQ), emphasizing the need for prospective suppliers to demonstrate competencies.
An IFB is generally used when the institution has specific, well-defined requirements and is primarily concerned with obtaining the lowest price from qualified bidders. IFBs are typically used for standardized goods or services where price is the primary factor in purchasing decisions.
An RFI is used to gather information about available products, services, or solutions in the market. It’s often a precursor to a more formal RFP or IFB. RFIs help institutions understand market capabilities and refine their requirements before putting out a formal solicitation.
Each college or university has guidelines for purchasing goods and services and which solicitation method to use. For example, Idaho State University does not require quotes for purchases of less than $10,000; requisitions between $10,000 and $249,999 require the procurement team to send out solicitations; and purchases of $250,000 or more require an ITB or RFP.
Timelines vary greatly depending on where the dollar amounts fall. Procurement activities under $10,000 can be handled immediately. Between $10k and $250k, the process takes approximately two to six weeks, while purchases of $250,000 or more take between two and five months.
Your guidelines and timelines may look significantly different. At the University of Maryland, competitive solicitations aren’t triggered until purchases top $25,000.
Solicitations can also take different forms. When competitive bidding is required, a solicitation often requests sealed bids. Complex projects may require a significant amount of discussion and negotiation with suppliers to hone proposals. In other cases, adopting a pre-existing contract may be the best solution.
You have to be careful when using adopted contracts. For example, some GPOs will adopt contracts that states or other institutions put out, essentially cloning the requirements and then making the resulting contracts available to members. This might be fine for you, but the details may also be crafted for unique situations that add to the cost. For example, adopting a California solicitation may include more rigid standards for emissions, green construction, or sustainability than what you require—driving up your costs.
Another alternative for colleges and universities is cooperative contracts. Offered by group purchasing organizations (GPOs) and sourcing cooperatives, these contracts leverage the aggregated purchasing power of multiple organizations. For example, E&I Cooperative Services competitively solicits contracts from suppliers on behalf of its 6,000 + member institutions.. This process produces volume discount pricing, which members have the option to use.
E&I Cooperative Services works exclusively with the education sector. As a non-profit and member-owned organization, E&I leverages deep category knowledge and an intimate understanding of the unique needs of higher education to solicit and negotiate contracts favorable to that sector. There is no cost to become a member of E&I Cooperative Services and no obligation to opt-in to available contracts.
View available contracts and see where you can start saving today.
