By Joe Nathan, January guest blogger
Looking for some good news? How about the more than $226 million in savings by cooperative purchases: that’s the record since 1994 of the Midwestern Higher Education Compact (MHEC.org), based in Minneapolis. The state of Minnesota spends $90,000 a year to be a member of this 12-state cooperative.
I'd love to hear from college and university folks about how this has worked for you and your institution.
MHEC President Larry Isaak reports that in the current fiscal year, the cost savings programs plus the savings to students from the student exchange program yield a benefit/cost ratio of 45 to 1 when comparing the state funds paid to MHEC with the savings of $45 million.
MHEC Vice President and General Counsel Rob Trembath told me that because Minnesota belongs to MHEC, school districts and charter public schools, along with colleges and universities may purchase an array of items through this organization without paying any membership fees. Last fall, State Senator Sandy Pappas (who also is an MHEC Commissioner) praised MHEC and Larry Isaak. Over the last six months, our organization worked with them on a conference. I agree with Pappas.
Isaak is a humble, low key, results-oriented person. He is a Certified Public Accountant was chancellor of the North Dakota University System for almost 10 years. Isaak is the kind of person who is focused on getting things done, rather than worrying about publicity or credit.
But he and his MHEC colleagues deserve plenty of that, for they have much to teach. Gov. Tim Pawlenty cited MHEC in a press release saying that Minnesota could save money by doing more collaboration, including cooperative purchasing.
A group of Western states was so impressed with MHEC efforts that in 2004 the states asked to participate. MHEC agreed. That gives us even more purchasing power.
Isaak estimates that students and families are saving more than $14 million a year in college tuition, because of agreements that MHEC helped negotiated. The organization also has created an electronic transcript program to simplify and ease sharing of information between high schools and colleges. That means less time and paperwork.
Now, about cost savings by cooperative purchases. Here are a few examples:
- A Master Property program helps lower insurance costs (MHEC estimates by more than $40 million since it was established). More than 100 collegecampuses are insured.
- Computer discounts are available not only for hardware, but also for training and longer warranties. Whether an organization is purchasing a handful or hundreds of computers, discounts and free shipping are available.
- Software – Special prices are available for a variety of programs from major companies, including Novell, Oracle and Trend Micro.
- Telecommunications from companies such as Quest, Sprint and Verizon.
Hopefully, school districts and charter public schools around the state will look at possible cost savings available through MHEC, as well as other groups, such as service cooperatives.
Cooperative purchases will not solve all our financial challenges. But they do offer impressive savings opportunities.
Recent Comments