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Consortium Power: It’s All in the Numbers

January 10th, 2019 by

Most Americans are familiar with membership-club retail giants like Costco and Sam’s Club. Members pay a nominal annual membership fee that gives them access to purchase name brand merchandise that includes everything from refrigerators to diamond rings at prices less than retail. Fortunately for many budget-constrained government and non-profit organizations, organizations such as The Interlocal Purchasing System (TIPS) and MiCTA provide similar purchasing power to state and local government agencies, private and public education institutions (K-12 to higher education), healthcare and non-profit, religious and charitable organizations. These organizations play a big role in helping them stretch their dollars when purchasing high‑cost services such as telecommunications and electricity at prices below what they could achieve if purchasing as a single buyer. In addition to zero membership costs, the following are just a few of the most tangible benefits of participation—for both procuring entities and the vendors providing the services.

Education, government and non-profit organizations benefit from organizations like TIPS and MiCTA when purchasing network, communications and other technology services.

Time and financial resources savings

In most organizations, the RFP/RFQ process is time-consuming and expensive, requiring hours of staff time to develop requirements, research prospective vendors and review submissions before finally awarding the contract. Instead, co-op members can avoid the time-consuming and resource-intensive due diligence process because it is handled up-front by the purchasing consortium, often including assistance with the purchasing process by the qualified consortium. 

Competitive costs

One of the major advantages of consortiums is the ability to provide competitive cost solutions to their members. Consortiums can aggregate the requirements of many members and present a unified set of requirements that enables vendors to offer significant savings when services are purchased in larger quantities, even if the final product is multiple individual contracts. By leveraging the buying power of multiple schools, the consortium can combine the amount of services to gain these critical discounts, which in turn provides the best price to each individual participant.

Competitively procured contracts

Consortiums obtain access to pricing by following a national high-profile contract ordered approach to the acquisition of solutions. The process begins by identifying their requirements and negotiating contracts for services based on knowledge of needs (including cyclical purchasing requirements around E-Rate) across a broad expanse of jurisdictions and entities. A wide range of schools and government agencies at multiple levels now will have access to the most favorable pricing, terms and conditions, and a welcome measure of budget relief on purchases of network and communications solutions through a contract agreement with reputable vendors.

Purchasing flexibility

With a consortium procurement, schools and government entities collaborate to make buying decisions, and are often part of the co-op’s vendor selection process. Ultimately, the decision still resides with each individual entity. If the consortium does not provide the best value, the school or government agency does not have to purchase it. At the same time, consortium purchasing often provides a risk-free way to evaluate creative solutions that might not have been feasible using traditional methods of procurement. 

Priceless intangibles

Because of their status as the entity representing many buyers, purchasing consortiums can provide many intangible services regarding matters that affect its members such as monitoring telecommunications and technology legislation, regulatory processes, informing its membership of technology changes and legislations, and conducting research that benefits its members. In addition, consortiums can support technological advancements through grants for specific projects relevant to its members, as well as work closely with vendors to ensure that its members’ technology needs are met.

Organizations like TIPS and MiCTA will become increasingly important as the complexity of today’s technology landscape continues to increase. With their help and the collaboration and cooperation of premier vendors like Windstream Enterprise, members can confidently embrace the future knowing they’re getting support from highly-experienced providers and access to the best and most cost-effective network and communications solutions available.

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