Procurement is a collaboration question too

Universities are lots of things to lots of people.

They teach, research, employ, and they make the national economy tick over through purchasing lots of stuff. There are any number of economic impact reports that demonstrate the impact that universities have on the economy. For example, the University of Manchester’s 2025 report shows over £880m of economic impact through their operating and capital expenditure.

However, not all spending is the same even if it creates the same amount of economic value.

A university could run up a healthy surplus by partnering with a bookies and a tobacconist. It would deliver value in the supply chain, it would create jobs, it would crowd in investment if similar businesses saw it succeed, and it would undoubtedly look impressive on an annual report about gross value added.

Burning up and burning out

Obviously, it isn’t a good use of public funds to prop up businesses with socially dubious outcomes whose model relies on repetitive harm to customers.

There are moral, social, economic, and other values to take into consideration when universities find partners to work with. The key consideration is how a broad range of beneficiaries should be considered when a collaboration is entered.

At its heart procurement is a collaboration exercise.

It is a judgement on value. If the only goal is to work with a partner to deliver the maximum financial benefit either in the lowest cost, the biggest margin, or the most advantageous deal to your side, then this isn’t really a collaboration at all. This is a business partnership and the only collaboration consideration is whether a contract sufficiently upholds both ends of the bargain.

Higher education institutions are fundamentally different to most large buyers of goods. They have an obligation to maximise value – student tuition fees shouldn’t prop up poor business practices – but they have a wider civic and social mission. The way in which a university spends money is an extension of the good it is trying to do in the world.

The second way higher education institutions are different is that they procure a range of intangible goods.

If I am buying cartridges for printers, I can devise a relatively straightforward set of criteria. It will involve cost, capacity for my partner to supply them, speed of delivery, environmental considerations, social value considerations, customer service, and so on. It isn’t always easy to make sure a partner delivers to agreed standards but it is easy to set out what those criteria should be.

It is much harder to procure services in education. As institutions are looking to increase their bottom line they will consider partnerships with providers unlike themselves. This might be pathway providers, vocational training providers, local colleges, or something else entirely. Here, it is not only necessary to collaborate on quantifiable metrics like student numbers, progression, and outcomes, but on qualitative ones too like quality of the learning experience.

It is the case that institutions have lots of experience in quality assurance and will have stringent checks for partners, but it is hard to know how good something is until a partnership is underway. Of course, at that point, it could be too late.

Universities as suppliers

As well as buying goods, institutions are also the suppliers of services.

Procurement can be the starting point of deeper collaborations but it means thinking about institutions differently. In the education realm this means considering not only where an institution might secure a competitive advantage but where procurement might open the door to try different models of teaching entirely. A tender, contract, or other kind of delivery agreement can allow institutions to do work in different ways they may otherwise not consider.

For example, the University of Sunderland has a deep and ambitious relationship with the Northumbria Healthcare NHS Foundation Trust. This partnership builds on the university’s existing strengths as it was “selected to co-create the programmes due to its strong track record and experience in delivering innovative healthcare education and blended learning initiatives.” There is now a range of programmes taught where students actually are, in skills they clearly need, in purpose built facilities designed for the task. It is a partnership brought about by a competitive tender which aligns to the needs and values of both institutions.

The lessons here are manifold. There is an opportunity for higher education institutions to consider where competitive tenders might further their own institutional needs and serve a wider public benefit. Institutions should be careful not to become a service delivery body for all places all the time, but there are times where stretch, imagination, and the right partners can make a procurement process the basis of new collaborations.

As the supplier of services universities are also uniquely placed to expand social value in the supply chain. They are the only public institutions that teach, research, employ, buy, and sell goods, all at the same time. A single imaginative tender can feed a future collaboration which has benefits that stretch beyond the two institutions.

In an era where university finances are stretched to breaking point, it is clear that the old models of doing business cannot be sustained. Universities can be the suppliers of a bigger range of services to a broader range of clients and in doing so fulfil a bigger social mission. As institutions look to cut their services they should be careful to not do it in the areas where they may be uniquely placed to generate income, provide novel services, and do good for their places.

We’ll be discussing more about making collaboration work at The Collaboration Event in London on the 3 November. Programme and tickets here.