Buying in Bulk

Buying in Bulk

They provide economies-of-scale on hardware, networking and storage capability.

County, regional and statewide education service centers that provide shared purchasing power and technical support have been around for as long as a half-century, and some have helped districts gain lower prices on technology through economies of scale since the heyday of the Apple II. But the combination of tighter-than-ever budgets and greater-than-ever needs for computing and other leading-edge technology has made the opportunities that education service centers provide all the more valuable in the past three years.

“Nobody has any money. They’re looking for ways to save money,” says Lee Warne, executive director of the Association of Educational Service Agencies, which represents 553 agencies with an aggregate budget of $14.7 billion that collectively serve more than 80 percent of districts and private schools. “Folks are realizing that through aggregation—and not just in purchasing—there’s a way to do things a little more efficiently,” he continues. “As money is cut back to local districts, they can’t do everything themselves. They need to look for help.”

Originally charged with providing services like special education or products like filmstrips and reading kits, service centers have expanded their roles over the decades to include an increasing amount of technology products and services. “They’re being asked to do more than in the past,” Warne says. All but four states have such centers, representing more than 80 percent of districts nationwide; some that don’t belong to them are very large urban or county districts that enjoy their own economies of scale.

Warne says that education service centers have provided some districts with a “server farm” that offers automatic storage and backup off-site, have brought districts together into a shared online library system, and have helped rural districts hire joint technology staff when having their own proved too financially burdensome. “It’s easier for a regional agency to be on the bleeding edge of technology than a local district,” he says. “It’s easier to take a risk as a group. For example, mobile platforms [that provide wireless capability] are where a lot of districts are going to be” and some members can help districts understand it.

Going Nationwide—Even Worldwide

Some educational service centers have opted to offer cooperative purchasing outside their assigned areas—even nationally and internationally. The Cooperative Purchasing Network (TCPN), based in Houston and one of 20 centers in the state of Texas, started doing so when the state of Arizona asked it for help, which led to a name change from the Texas Cooperative Purchasing Network.

“We’ve done a good job of working with a lot of states to make sure that our purchasing process and specifications meet other states’ requirements,” says Bob Baker, deputy executive director of support services at Region 4 Education Service Center. TCPN, which was founded in 1997, is the cooperative purchasing solution offered by Region 4.  “The story we’re hearing [in other states] is the same as in Texas, with the economy, and districts getting pinched. … We’re able to bring to bear economies of scale that far exceed the largest districts.”

Similarly, the PEPPM Technology Bidding and Purchasing Program at the Central Susquehanna Intermediate Unit (CSIU) in Pennsylvania brings in more than a quarter of its business from outside the state, according to Jim Randecker, procurement technology and services administrator for the CSIU, as well as director of PEPPM (an acronym that used to stand for Pennsylvania Educational Purchasing Program for Microcomputers but has become outdated in more ways than one).

Bucks County ESCPEPPM started about 30 years ago and has gone national in the past 11 or 12 years, Randecker says, although the CSIU has never confined itself to the four counties that the state department of education charged it to serve. PEPPM bids across a manufacturer’s entire line of products, giving districts the ability to tap into bulk purchase orders on all offerings from Dell, Apple, HP, Cisco, Xerox, Canon and more. “We have been netting from year-to-year growth in the face of a down economy,” says Randecker, who adds that districts’ orders have averaged around $75 million per year, with savings of 10 percent to 60 percent depend that the economy and the effect on taxes in public education is having an effect.”

According to Randecker, PEPPM serves districts of all sizes. “It kind of runs the gamut,” he says. “We have the big districts, which is kind of unusual because they have large procurement offices. The economy has put a strain on them. But it’s especially the smaller schools that get the benefit of the volume we’re bidding on, and therefore the low prices.”

300-School Network

In New York, 37 Boards of Cooperative Educational Services (BOCES) fulfill this function, each covering one county or more depending on population density. In Nassau County, on Long Island, the 45-year-old BOCES is in the process of building one of the largest fiber-optic networks in the country to connect all 56 school districts—about 300 schools total—at no cost to the districts. Seven are now connected, and Nassau BOCES hopes to have 20 more added during this school year, says Tony Carfora, Nassau BOCES’ director of curriculum instruction and technology. Nassau BOCES anticipates savings of at least 15 percent in districts’ telephone and Internet bills, while doubling their bandwidth capacity. “We buy bigger,” says Carfora, who adds that the Nassau BOCES has been buying tech since the “green screens” of the early 1980s. “Instead of buying Internet service for each individual district, we’re buying for the entire network with rates that are much less expensive and sharing the reductions with the component districts. The same thing is true with telephone service.”

This countywide network, called BO-TIE, will provide more than cost savings. “[Districts] can send all sorts of data—student data, educational data, videos—on this network,” Carfora says. “School districts can now share information among themselves.” The Nassau BOCES handles projects at the individual district level as well. In the Massapequa Union Free School District—the name refers to its independent status, not lack of teachers’ unions—Nassau BOCES helped to purchase and install nearly 1,900 new instructional computers during the summer of 2009, at a 40 percent discount. It was the district’s first such refresh in nine years, according to Dominic Potenza, senior manager at Nassau BOCES, who served as project manager for that installation.

bulk“They came to us not only to purchase the equipment, which provided economies of scale in terms of volume, but also the ability to use our team for implementation and management,” Potenza says. “We have a full team of people here at the BOCES that coordinated the distribution effort throughout nine schools plus the administration building. It was a massive undertaking that went very smoothly.”

“For technology services, their office is second-to-none,” agrees Bob Schilling, executive director for assessment, student data and technology services at Massapequa, which has nine schools. They review specifications with vendors, work off the request for proposals—and they project-manage it, he adds.

In addition to the hardware savings on the $1.6 million installation, Massapequa the following year received a reimbursement of 43 percent from the state of New York based on a formula through which each district is reimbursed for BOCES services; that formula is based on factors such as the total number of students and the percentage of families below the poverty line.

The state recognizes the value of technology upgrades and gives incentives, Schilling says. “I wouldn’t have been able to do the sheer amount of projects I’ve been doing without that aid.”

Common Cloud

In Illinois, more than 150 districts have banded together to create a unified cloud infrastructure. Tech staff at Bloomington Public School District 87 set the notion in motion based on conversations they had over time with colleagues in other districts around the state, says Jim Peterson, technology director for Bloomington and chief technology officer for Illini Cloud. “We’re able to offer infrastructure for schools that there’s no way they could possibly afford themselves,” he says. “It’s about disaster recovery more than anything.”

When districts have lost on-site servers due to tornados, for example, they have lost their data. “This allows us to make sure it’s off-site, at least 100 miles away,” Peterson says.

Districts save at least 50 percent over what they would using a commercial cloud service like Amazon or Microsoft. “We charge what our costs would be, plus a sustainability fee,” says Jason Radford, system administrator in Bloomington and cloud architect at Illini Cloud. “Districts want to put stuff up in our cloud because it’s more secure than what they put up in their own district. School districts can’t afford $1 million worth of security—but now they can.”

The cloud also helps with districts’ burgeoning storage needs as, for example, what once would have been written book reports morph into multimedia projects that sometimes include audio or video. Radford says that installing this storage capability on the cloud saved Bloomington between $130,000 and $150,000 over the cost of district-based servers. “It’s not just the cost savings, it’s the agility,” he adds. “It allows you to take that money that you had to invest in technology and redirect it into the classroom.”

IlliniCloud has enabled Glenview School District 34 to upgrade quality and save money on disaster recovery, several server applications that support classroom work, and the district’s entire library system. Next, the district is looking to upload the student information system, which the district tested in November. “Instead of buying servers on our own, we’re looking to place those needs on the cloud,” says Brian Engle, executive director of educational technology. The cloud could save $7,000 to $8,000 every two to three years for the student information system, for example, in servers the district doesn’t need to keep purchasing. During the test phase, he adds, “instead of placing it on an overtaxed server at the district, we placed it on the cloud.”

Other County and State Networks

Just north of Philadelphia, the Bucks County Intermediate Unit #22 (BCIU22), which has provided support to its member districts for over 40 years, has been expanding its instructional and infrastructure support services to provide significant savings for members, says Pamela Newman, online learning manager. For example, BCIU22 has leveraged volume pricing discounts on distance learning services and hardware, such as online world language instruction through myLanguage360 and videoconferencing endpoints from LifeSize, as well as saving 30 to 40 percent on Microsoft licensing.

Bulk purchasing through the 57 members of the Regional Educational Media Center Association of Michigan has more than doubled, from $26 million to $54 million, over the past five years, says Bill Miller, executive director of the Michigan Association of Intermediate School Administrators. The 49-year-old agency once concentrated on providing technology like filmstrips, but these days it’s more focused on computer hardware and software, flash drives and online programming for functions like student data, Miller says, adding that Oakland Schools alone have saved $4 million in tech purchasing.

“It’s grown steadily, in terms of the impact on statewide purchasing,” he says. “It’s come from the discounts we get by negotiating with various vendors on pricing and then passing those savings along.”

Warne forecasts continued growth for educational service centers. “The environment we find ourselves in, financially, isn’t going to change a whole lot,” Warne says. “They respond to the needs of school districts.”


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