Business (Managing K-12 Education)
Procurement: An Emerging K-12 Profession
- By Michael Fickes
- February 1st, 2018
PHOTO © PATTARAWAT
K-12 school districts still employ buyers, but the title has gone out of fashion. Yesterday’s buyers are today’s procurement professionals, thanks to the tremendous complexities that now arise in buying, inventorying, and managing school district supplies.
Adding to these complexities is the tremendous size of today’s public-school districts. “For example, L.A. Unified, Houston ISD, Miami Dade, and Chicago Public Schools each represent hundreds of thousands of students and contain 400 to 500 or more separate physical campuses,” says Duff Erholtz, National Joint Powers Alliance (NJPA) membership development administrator.
NJPA is a national public service agency that provides cooperative purchasing solutions for government and education entities.
“In today’s public school districts, the terms ‘purchasing and procurement’ have distinctly different meanings,” says Gary Appenfelder, director of purchasing with Metropolitan Nashville Public Schools in Nashville.
“There are different roles based on the size of the district,” says Sue Peters, director of K-12 market development with E&I Cooperative Services, a not-for-profit purchasing cooperative focused on education.
“Often in smaller schools, the business officer may also be in charge of procuring and developing contracts with suppliers,” Peters says. “In medium to large districts, procurement is part of the larger institutional strategy.”
“Purchasing is simple and transactional—I buy it and it is delivered or I go get it,” adds Appenfelder. “You can go out and buy or purchase pencils. The cost is always about the same. Pencils are not a strategic acquisition.
“But procurement is strategic. It includes buying, but adds analysis, planning, cost management, and value leveraging.”
The analysis of past spending is particularly important, continues Appenfelder. “Spend analysis,” he says, “teaches you where the potential opportunities are for better leveraging of capital and costs.”
Erholtz agrees. “Purchasing, today, often requires process management, with transactions ruling the day,” he says. “The term, procurement, expands the transactional to be more encompassing and strategic. It has to do with taking the time to understand your internal customer’s needs and then sourcing goods so that you end up with the best overall solution.
“Supply management encompasses both purchasing and strategic procurement in a cradle-to-grave fashion. It incorporates warehousing, life-cycle costing and sometimes total cost of acquisition.
“Here are three simple, but on-the-money, definitions of these functions: Purchasing is a job; procurement is a profession; and supply management is an art,” he explains.
Procurement Professionals Work with Cooperatives
Procurement professionals, today, can work with large buying cooperatives that can deliver volume buying discounts to their clients.
Such discounts can be worth a lot of money. Consider, for instance, last year’s work by Jericho, N.Y.-based E&I Cooperative Services. E&I provides its 4,100-member institutions with access to more than 120 competitively awarded contracts and consulting services. Last year, E&I’s volume buying expertise produced more than $200 million in savings for its members.
Providers compete for school district business by finding discounts. “When we solicit, we analyze our pricing compared to the existing contract and estimate the savings opportunities,” says Gary Link, senior vice president of contracts and consulting with E&I. “We look at our average pricing across the board. Then based upon the volume of the contract, we can estimate pricing and potential savings.”
Achieving savings of that scope requires talented and experienced procurement professionals. “Professional development in this field comes from the National Institute of Governmental Purchasing, which offers a seasoned group of trainers and qualified certification standards,” says Peters.
NIGP certifications include the Universal Public Procurement Certification Council’s (UPPCC) Certified Professional Public Buyer and Certified Public Procurement Officer. NIGP offers courses and workshops that prepare professionals for the exams leading to these certifications.
To date, the UPPCC has certified more than 10,000 professionals primarily within the U.S. and Canada, and also in other nations around the globe.
Not the Next Salesperson
Sometimes, there is a tendency within buying organizations to rely on the next salesperson that comes through the door. Of course, resisting such tendencies is a wiser path.
“Solid, thought-out strategies, and not salespeople, make procurement efforts successful,” says Appenfelder. “Good strategies make it possible to develop a return on investment or ROI.
“ROI is an easy concept in private industry, but in the K-12 public sector it can be very difficult to grasp, not to mention calculate.
“How do you measure the ROI on a $20-million school building? If you maintain it, and it lasts for 50 years, you may be able to calculate an ROI in terms of the graduation rates and the quality of students’ records.
Then, too, districts spend millions training teachers and buying materials. How does that relate to ROI? Again, graduation rates and student records help to define ROI.”
Procurement and supply management play into this as well, in many ways. Quality surroundings and excellent materials certainly help to maintain and improve performance in the classroom. And, of course, quality people—teachers and administrators—make the best use of quality surroundings and excellent materials.
“Department leaders, of course, must have basic procurement skills,” Appenfelder says. “But more importantly, leaders must be competent and efficient at internal marketing—selling management on the concept that quality procurement plays a role in pursuing and achieving the district’s educational strategies.
“The department head must be able to develop procurement strategies that will help the district pursue its educational strategies. What, for instance, classroom technologies do we need to maintain classroom performance in today’s evolving world?”
Consider a specific question, for example: What kind of tablet technology do your students need to take full advantage of the courses your English and mathematics teachers are presenting?
Then, of course, there is the question of affordability. Only the wealthiest school districts today can afford to provide students with such a high level of technology. Can economical—not cheap, but economical—procurement strategies provide savings that will enable quality computer technology purchases? It is, at least, worth considering.
“Maximizing limited resources while achieving the school district’s overall goals can be achieved by effectively managing ROI,” says Erholtz. “Of course, we all have limited resources—money, staff, and time. Making the most of limited resources requires a smart, strategic procurement plan.”
Asks Appenfelder: What would make the classroom world better? What technology do we need?
And it isn’t just technology. Some years ago, for example, Appenfelder wrote an ethics policy for Nashville Public Schools, and when the executive staff accepted it, he suggested appointing a person to oversee the execution of the policy. “It was important to have a resource person you could go to with an ethical question,” he says.
What does that have to do with purchasing? “Top management must understand all of the federal, state, and local compliance issues and ensure that procurement practices reflect those issues.
In the end, then, successful procurement is judged by the quality of the educational surroundings and materials that students, teachers, and administrators are provided. It also requires a well-informed understanding of the official and legal underpinnings involved in the purchasing of those materials.
It all matters.
This article originally appeared in the February 2018 issue of School Planning & Management.