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Collaborative Purchasing Efforts Result in Significant Savings to Member Institutions

Nov 21, 2013

As CIC institutions look for more ways to reduce costs, most have been undertaking strategic sourcing initiatives that leverage the buying power of each campus.  Often these schools have overlapping needs for better pricing on specific services or commodities.  In such cases, cooperative procurements approaches can at times deliver both lower pricing for goods or services being acquired as well as significant process cost savings.  Where the schools can agree on the specifications for request for quote/proposal process, instead of having 15 buyers going through the same extensive but required process, one can take the lead with input from a small team of representatives from functional areas as well as other procurement professionals to go through the process once.

The CIC Purchasing Consortium (CICPC), led by CIC Procurement Directors at member universities, facilitates collaboration among member institutions to share information on common issues and challenges and on procurement related opportunities.  This includes identifying strategies to implement best practices and handle emerging issues, delivering cost savings through strategic sourcing initiatives to support other functional areas across member institutions, and identifying leadership and professional development opportunities. 

Recently the CICPC has successfully negotiated agreements that are expected to result in significant cost savings for participating CIC institutions each year.  The agreement with General Information Services (GIS) to provide background checks, I-9 employment eligibility, e-Verify, credentialing services has been adopted by eight campuses already with more planning to soon.  Pricing under this agreement is projected to save participating schools nearly $700,000 each year as compared with the prior agreement.  This initiative was led by Betsy Costello and Jim Konrad of Northwestern University.

The other recent agreement is with Enterprise Holdings, Inc., which is the holding company for the Enterprise Rent-A-Car and National Car Rental brand rental car facilities.  Under the leadership of Beth Tapp and Tim Bray of the University of Minnesota, pricing is available to faculty and staff of CIC universities for both business and personal use.  Projected savings from this agreement over the previous agreement exceed $1.2 million per year.

In addition to these successful joint procurement initiatives, the Procurement Directors regularly share best practice information in dealing with both longstanding and emergent issues they face.  For example recent increase in fraudulent activities has presented risks that need to be managed effectively to minimize adverse effects to the institutions and their personnel.  By sharing how they are addressing these specific issues, procurement offices can more quickly implement measures without going through extensive discovery processes.

Because it is often difficult to standardize within an institution, let alone across several institutions, not all procurements of goods or services are suited to joint purchasing approaches. Successful agreements share characteristics such as a high degree of commonality in product/service specifications, reduction in procurement process costs, willingness of one institution to lead the efforts, opportunity for more favorable terms and conditions, and prospects of better pricing through leveraged buying power.  Having a “coalition of the willing” from three or more CIC campuses for a given collaborative procurement initiative works best.  CIC Procurement Directors on member campuses are willing to work with the appropriate stakeholders to identify opportunities.

For more information, please visit: List of Procurement Offices on member campuses.

 

 

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