Sweetening the Purchasing Group Contract Pot
As money and time grow tighter for procurement departments, interest in purchasing groups and their contracts has grown, says Duff Erholtz, manager of membership services, the National Joint Powers Alliance (NJPA), a municipal contracting agency. In fact, many institutions belong to several such groups—for example, says Bill Wheelock, Youngstown State University (Ohio) has membership in seven, including E&I Cooperative Purchasing, NJPA, U.S. Communities, and the Inter University Council Purchasing Group.
There are plenty of advantages to utilizing contracts established through these groups, says Wheelock. “By not having multitudes of competitive events, and by leveraging the group purchasing spend, I believe we save more than 20 percent over the costs we could achieve individually.”
Although the prices established by these contracts are typically set in stone, it doesn’t mean that procurement departments forgo all negotiation, says Cory Harms, associate director of purchasing at Iowa State University. “We negotiate on aspects of how service is delivered, or can tailor certain aspects to our needs, such as negotiating e-payment. We even negotiate green and sustainability aspects, such as using greener packaging or packing materials.”
So, while consortium contracts address much of the work up front and eliminate price negotiations, don’t assume all negotiation is off the table, says Wheelock. There are still opportunities to sweeten the deal.