School districts dive into cooperative commerce
When Boles ISD needed a new science building in 2011 for its rapidly growing high school in rural Quinlan, Texas, district leaders realized they couldn’t afford to build the lab they wanted. Although the district, 35 miles east of Dallas, received a $410,000 grant from the Texas Education Agency, it wasn’t enough to build the project according to architects’ plans.
But the project was salvaged by The Cooperative Purchasing Network (TCPN). Because the state-run co-op already had a construction management contract with Trane, district officials asked the company to look at the project. Trane recommended a cheaper alternative. Using the design-build method of construction—in which the same company designs and constructs the facility—and Trane’s job order processing contract with TCPN, the science lab was fully-funded with money left over to buy computers and furnish the entire building.
Acting as the general contractor, Trane pulled together a team to redesign the building, manage construction and handle furnishings.
“The costs had already been pre-bid by the TCPN statewide, so we did not have to individually bid the various trades for the job,” says Graham Sweeney, Boles’ superintendent. “It was so much simpler to deal with a reputable firm that already was locked into costs that were already pre-bid.”
Several national and regional cooperative purchasing groups like TCPN have long offered districts cost savings through pre-negotiated vendor contracts for commodities like office supplies. But co-ops are expanding their reach, enabling districts to save on construction as well as facilities’ products and services.
Rather than going through a bidding process and vetting vendors for each purchase, districts can save time and money through contracts that have already been competitively bid and awarded by expert negotiators at the co-ops.
How to begin cooperative purchasing
Districts can save time and money purchasing through cooperatives. Here are six steps for getting started:
- Browse the websites of purchasing cooperatives to learn what types of products and services are available. To locate cooperatives near you, visit the Association of Educational Purchasing Agencies (AEPAcoop.org), a group of educational service cooperatives from 26 states.
- Compare the co-ops’ product lists to your district’s needs to see if there are suitable vendors.
- If possible, get feedback from district leaders who are members of the co-ops you’re considering.
- Make sure district staff understand how much time and money can be saved.
- Contact a co-op representative to discuss your needs and their process for getting started.
- Involve facilities managers, purchasing professionals and other appropriate district staff in the decision about which co-ops to join and which vendor contracts to pursue.
These co-ops handle the entire contracting process for districts, from developing requests for proposals, analyzing bids, screening vendors, negotiating contracts and managing contracts, says Sue Peters, market development executive at E&I, a national purchasing cooperative.
“We are truly an extension of a member’s procurement department and in many cases become a school’s trusted advisor,” Peters says. “When we uncover a need, we introduce our business partners as a resource and possible solution.”
Membership in E&I is free to qualifying districts, and offers access to more than 100 competitively awarded contracts with suppliers such as HireRight, Grainger, HP, Bretford, American Express and OfficeMax.
Saving time & money
The New Albany-Floyd County Consolidated School Corporation in Indiana uses contracts from E&I to buy maintenance and custodial supplies from Grainger and to purchase office supplies from Office Max. When the district began using E&I’s OfficeMax contract, it was able to eliminate one full-time staff position, representing a savings of $45,000.
Renae Hull, supervisor of business services at the Metropolitan School District of Lawrence Township in Indianapolis, agrees that saving time is the “biggest benefit” of working with a co-op. Because the co-op has already solicited quotes or bids, negotiated contracts, and approved vendors, there’s no need for district staff to spend time on those tasks.
To save districts even more time, some co-ops are using technology to streamline the entire process. For instance, the Cooperative Purchasing Connection (CFC)—a group of nine cooperatives in Minnesota, North Dakota and South Dakota with approximately 675 member schools—recently launched Express, an online marketplace that allows members to use just one login to compare prices among several contracted vendors.
All of the co-op’s commodity-type contracts are pulled together in one website for districts to easily scan the options and make comparisons between prices, services and products. “Members can search between contracts, create shopping lists and place an order to multiple vendors using a purchase order or purchasing card,” says Eric Schuld, a regional representative for CFC.
When districts participating in E&I’s American Express plan make purchases with their American Express cards, they can get rebates. “K12 members can earn literally tens and hundreds of thousands in annual rebate checks by using the cooperative’s contracts,” Peters says.
Fred McWhorter, New Albany-Floyd County’s chief business officer and treasurer, says the district receives about $40,000 in rebates through E&I’s American Express contract.
Lawrence Township School District uses an American Express card to pay any vendor who will accept it—and in two years with E&I, the district has received more than $148,000 in rebates, Hull says.
The amount of the rebates is calculated based on three variables: the aggregate purchase volume of all participating members, the purchase volume of the individual member, and how quickly the individual member pays its bills, Peters says.
“The program is a true representation of cooperative procurement practices, since one of the most important factors is the aggregate charge of all participants in the program,” she says.
The program saves Lawrence Township schools labor and supply costs of paying vendors by check. Vendors get paid as soon as they invoice rather than waiting for the accounts payable department to print and mail checks, Hull says. And maintenance and other departments can make purchases online rather than seeking out vendors.
Nancy Mann Jackson is a contributing writer.