Nine Key Components of an Effective Charter School Purchasing Policy

Make no mistake: a strong purchasing policy can be a difference-maker for your school. It is among the most effective ways to maximize a school’s resources while minimizing the fraud, abuse and waste that can creep into the procurement process when a purchasing policy is either weak, vague or ignored. Yet most charter schools lack a clear, comprehensive, and well-thought-out purchasing policy — one people not only follow closely but recognize as strategically vital to the school’s overall success.

Time and money are a charter school business manager’s most precious resources. Developing a formal purchasing plan for your school can be one of the wisest use of those resources.  In fact, in my 11 years working with charter schools, I have found that the best purchasing policies don’t just provide guidance to purchasing decision-makers, they serve as a sustainable framework for adding measurable value to the school, year in and year out.

So, if you’re seeking to maximize the value of every dollar your school spends on goods and services, consider building a purchasing policy around the following nine elements:

1. 1. Include language specifying that procurement staff must comply with all applicable internal rules and regulations (approved by the school’s board of directors, typically), such as dollar amount thresholds for when to solicit multiple bids and when an RFP must be issued, vendor requirements, and more.
   2. Seek input and guidance from the school attorney in drafting the policy. Your school may be subject to a variety of external procurement requirements and guidelines from a school district or other authorizing body, along with state and federal agencies (if it receives grants or other funding from government sources), even private endowments, if they supply the school with funds. Your school’s attorney can shed light on which rules apply to your school.
   3. Banish the possibility of, and the appearance of, fraud and corruption by specifying the use of open, fair and transparent purchasing processes and methods, including how vendors and bids are evaluated, and the various steps of an open and competitive RFP process. The clearer the rules and regs, the less room there will be to question the integrity of your procurement decisions and processes.
   4. Include guidelines and safeguards to ensure the school procurement department and staff are good stewards of the school’s money. It’s vital to put in place systems and processes that allow administrators to demonstrate exactly how your school uses the funds it receives from public and private sources. Also consider developing guidelines and safeguards that make environmental stewardship a priority in the context of procurement decisions.
   5. Make reducing total cost of goods and services an articulated priority. Be sure your policy specifies that decision-makers take into account the total cost of the goods and services they’re looking to acquire. This approach, based on total cost of ownership, or TCO, factors in all the direct and indirect costs associated with a product or service over its lifecycle, from shipping and delivery to maintenance and disposal, obsolescence, and beyond. Consider creating a decision matrix specifying the factors beyond initial cost to weigh in evaluating bids, and how they’re weighted.
   6. Whether or not your school subscribes to a TCO-focused approach, be sure to clearly articulate the evaluation criteria administrators/buyers should use for purchases, and provide guidance on how those criteria could be prioritized/weighted. Be sure to also specify when — and the extent to which — to involve the end user (such as a teacher or facilities staffer) of the product or service in the RFP development and purchase decision-making process.
   7. Develop clear guidelines on which purchasing processes to apply, when. That means providing decision-makers with specifics on when to buy on third-party contracts (such as through a group purchasing organization like BuyQ), when to use an internal RFP, when to put the purchase of a product/service out for competitive bid, etc. This step is key to making your purchasing program a strategic cog within the school’s overall operations. In my experience, the best-run, most resource-efficient procurement operations are those that have eliminated the guesswork around which processes to use, when.
   8. Create and implement a framework within which to institutionalize procurement systems processes and knowledge. Generally speaking, I have found that the more you can integrate, institutionalize and standardize the various moving parts of your school’s procurement operation, the better. Having a system (such as some type of procure-to-pay software) that allows administrators and members of a procurement team to track procurement activities, store and share purchase data, generate metrics, and retain and share institutional knowledge, can be a huge plus for a school, for the time (and monetary) savings it can provide.
   9. Develop a compliance-friendly system for procurement record-keeping. Solicit input from your school’s leadership, as they may have very clear ideas about how they want data about purchasing activities handled, especially for compliance purposes. Here’s another area where the right software investment can pay immediate dividends.

About the Author

Marco Rafanelli has been serving charter schools for over ten years, first as the Director of Member Business Services with the Colorado League of Charter Schools and now as the Founder and CEO of BuyQ. Marco received his undergraduate degree from the University of Colorado at Boulder and his MBA, with a focus on social entrepreneurship, from the University of Denver.