In a collaboration that could save millions of dollars, Michigan's 15 public universities will team up with the state when purchasing goods and services.
Developed from the concept that buying in bulk saves money, Michigan's universities signed onto the State of Michigan/Higher Education Purchasing Consortium.
Under the consortium, schools can choose to sign onto different contracts depending on each school's needs.
Bridget Medina, spokeswoman for the Michigan Department of Management and Budget, said the initiative is a smart business move and didn't develop because of Michigan's poor budget.
"This is looking at the situation from a business perspective," she said. "It makes good sense to try and leverage buying power when you can."
Medina said the initiative will help schools when purchasing goods such as computer software, janitorial services, furniture and road salt.
She added that the state and some universities are developing a contract to purchase natural gas.
The state hopes to save $1.5 million in natural gas from the initiative, Medina said.
Michigan is in the midst of a $920 million budget shortfall, and Michigan's 15 public universities face up to a 6 percent cut in state appropriations. Gov. Jennifer Granholm is expected to announce her executive order soon, and the order includes proposed changes to Michigan's current budget in order to balance the state's budget.
MSU President M. Peter McPherson said Michigan legislators should get the message that universities are doing all they can to save money and possibly spare colleges from the next round of higher education cuts.
"We're figuring out every way we can to save resources during these difficult times," he said.
Pamela George, MSU's director of university services, said MSU has collaborated with the state previously when purchasing items such as vehicles and janitorial supplies, but partnering with other universities will benefit all parties.
George said states and universities have developed subcommittees in areas such as energy, information technology, travel and mail to discuss partnerships.
"If we can reduce costs, it will help with our overall budgeting," she said. "What we're hoping we can do is consolidate purchasing and negotiate for better contracts to reduce cuts for everybody."
During the last round of budget cuts, the state sliced MSU's budget by $33 million, resulting in MSU cutting $31 million from the university and raising tuition by 9.9 percent this fall.
Michael Boulus, executive director of the Presidents Council, State Universities of Michigan, said he hopes the effort shows legislators that Michigan's universities are serious about keeping costs down.
"Our message has been that we have strived to keep cuts down," he said.
Boulus said most universities have managed to keep per-student costs at or below the rate of inflation, during a period of time when enrollment keeps increasing.
He added that MSU's cost-per-student is 1.6 percent compared to a 3 to 4 percent inflation increase.
If the state follows through with its 6-percent cut, public universities would have absorbed $250 million in cuts during the last year, amounting to a 16-percent state appropriation loss, Boulus said.
"What other business operates with less during a time of growing demand?" he said. "How can we expect universities to continue to provide quality education with less money?"
Antonio Planas can be reached at planasan@msu.edu.
