Purchasing goods and services typically accounts for 20% to 33% of a higher education institution’s budget. As schools look for more efficient ways to manage that spending, cooperative purchasing has become an increasingly common strategy. In fact, more than 62% of organizations have adopted group purchasing organization models to streamline supplier contracts and improve purchasing consistency.
So, what is a GPO, and how can using one produce measurable value for a school, college, or university?
What Is a GPO?
A group purchasing organization (GPO) brings participating organizations together to increase their collective purchasing power. The GPO competitively solicits or negotiates contracts that eligible members can use to purchase goods and services from awarded suppliers.
Instead of approaching the market with the purchasing volume of one school, participants can benefit from demand aggregated across many institutions. This scale supports stronger pricing, more favorable terms, and service commitments that an individual institution might have difficulty securing independently.
A GPO is not a supplier, distributor, or replacement for an institution’s procurement department. Schools remain responsible for deciding what to purchase, confirming that a contract satisfies applicable requirements, and selecting the agreements that best fit their needs. But cooperative contracts through
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GPO Purchasing Power Creates Savings
Suppliers commonly structure pricing around expected volume. A single institution may have substantial overall expenditures but limited purchasing volume within an individual category. Demand may also be spread across departments, campuses, schools, or administrative units.
Group purchasing organizations aggregate that demand. The resulting contracts leverage volume-based pricing, standardized discounts, and often stronger service-level requirements.
The value extends beyond the price. Procurement teams can also consider freight, implementation costs, product availability, payment terms, warranty protection, customer support, and supplier performance. An agreement that reduces administrative effort or improves service reliability may create meaningful savings even when its unit price is similar to other options.
Some GPO models also provide patronage refunds or other rebates and incentives based on purchasing activity.
GPOs Reduce the Work Behind Contracting
A competitive solicitation can require months of work. Procurement teams must research the market, gather stakeholder requirements, write specifications, publish documents, manage supplier questions, evaluate proposals, negotiate terms, and complete legal and administrative reviews.
That work remains essential for strategic purchases with highly specific institutional requirements. However, conducting an independent solicitation for every purchased product or service is likely impossible given the increasing expectations to reduce costs and move faster despite tighter-than-ever budgets and increased workloads.
Competitively solicited GPO contracts provide another sourcing path. Rather than duplicating the RFP process for each solicitation, academic institutions can opt into competitively solicited cooperative agreements that meet compliance requirements.
This can shorten sourcing cycles and provide departments with faster access to qualified suppliers. It also allows procurement professionals to focus more attention on complex projects, supplier performance, contract adoption, and categories where an institution-specific solicitation offers greater value.
Where Schools Can Use GPO Contracts
Group purchasing organization contracts can support routine campus operations as well as specialized academic, administrative, and research needs. Depending on the organization and its contract portfolio, categories may include:
- Athletics
- Facilities & MRO
- Financial Services
- Food & Food Services
- Information Technology (IT)
- Logistics & Travel
- Office & Classroom, Interiors
- Professional, Consulting & Administrative Services
- Research & Scientific
GPO Contracts Support Compliance and Standardization
Well-structured contracts give campus buyers a clearer path to approved products, services, pricing, and suppliers. This can reduce isolated purchasing decisions and improve consistency across departments or locations.
GPO agreements may include documented solicitation records, established commercial terms, supplier requirements, pricing structures, and performance expectations. These elements can help procurement teams demonstrate how a supplier was selected and give departments more confidence that they are purchasing through an institutionally approved channel.
Once approved, contracts should be easy for campus buyers to find and use. Catalogs, eProcurement system integrations, and clear communication can improve adoption to help you capture value.
Why a Member-Owned, Education-Focused Model Matters
Not every GPO is designed around the same industries or member priorities. Education institutions operate within distinct budget structures, compliance requirements, approval processes, and decentralized campus environments. A sourcing cooperative focused exclusively on education can develop contracts and support services around those realities.
E&I Cooperative Services is the only member-owned, nonprofit sourcing cooperative focused exclusively on education, counting more than 6,600 academic institutions as members. E&I has ready-to-use cooperative agreements for a broad range of procurement needs, including eProcurement systems. Every contract includes the E&I Economic Benefit ModelTM, which shows you the total economic benefit of implementing a cooperative agreement.
View more than 260 cooperative agreements and see where you can save time and money in your procurement process with E&I Cooperative Services.
