Five Scenarios Where It’s Wise to Go With a GPO
For Chad Miller, the writing is on the wall. Miller, the chief business offer at High Point Academy in Aurora, Colo., soon will need to start buying dozens of new SMART boards to replace the aging boards that equip all the classrooms at the 750-student charter school where he oversees purchasing.
Rather than endure the time-consuming and often patience-testing process of issuing an RFP or gathering vendor quotes for the SMART boards and managing every aspect of the purchase himself, Miller says he’ll happily forgo his own vendor selection and negotiation process and instead purchase through a group purchasing organization (GPO) contract, as he does with many of the school’s strategic purchases.
“I wear so many hats, which isn’t unusual at a charter school, so being able to rely on someone to do all this for you is really valuable,” says Miller, who’s been using group purchase contracts since 2015 as part of his overall procurement approach.
While certain charter school purchasing situations still warrant an RFP or some form of competitive bid solicitation, more charter school decision-makers like Miller are discovering that relying on a GPO for a segment of their purchases provides substantial savings in two areas where schools tend to be especially strapped: staff time and, of course, money. Oftentimes, the price negotiated by a GPO on behalf of its members can be 80% less than retail and even 10 to 20 percent less than what a school may have already negotiated with a vendor.
The time savings are also substantial. All the time spent crafting RFPs, collecting and evaluating bids, fielding calls from salespeople, sending staff out on shopping errands — those are hours that could be better spent. Miller says he can cut the time his spends on certain purchases in half simply by using a GPO contract.
That’s the “why” behind aligning with a GPO. But what about the “when?” In which types of scenarios does it make sense to go with a GPO? Here are five:
- For supplies used in your school’s daily operations. These items are ordered on a regular basis and can be easily ordered online, including office and classroom supplies, facilities supplies and janitorial supplies.
- For strategic and planned purchases of products, such as items on your school’s two-year or five-year plan that you know you’ll need to acquire, from furniture to technology to sporting equipment. Purchase amounts may vary from $2,000 to more than $25,000.
- For specific facets of a large-scale capital project, where a GPO’s vendor relationships and purchasing leverage can come to bear. While a school won’t likely use a GPO for professional services such as hiring an architect and a structural engineer for a new wing of classrooms, it may benefit from enlisting a GPO to purchase the furniture, computers and other equipment to fill those classrooms. A GPO can step in and identify specific aspects of such a project where it can save a school time and money, then help quarterback those aspects.
- When your school’s purchasing policy requires that you receive multiple bids or conduct an RFP before making a purchase. A purchase executed through a GPO-orchestrated contract often meets those requirements.
- When total cost matters. As cost-sensitive as most schools are, oftentimes the wisest purchases are those that account for total cost of ownership (TCO). For TCO-focused schools, it makes sense to align with a GPO that factors vendor service and support, product quality and durability, etc., into their contracts. Because, as Miller points out, “it’s not always just about price.”
Not every type of purchase is suited to a GPO. Here are a few that typically are best left to school decision-makers:
- Services provided by local contractors, including janitorial services, landscaping, building maintenance, food service, IT break/fix and transportation.
- Professional services provided by attorneys, accountants, architects, etc.
- Curriculum materials.
- One-off products that are highly customized for the school, like signage and modular buildings.