Centralized procurement effort aimed at reducing administrative costs, adding to $124 million efficiency and effectiveness plan
BOSTON, Mass. – The University of Massachusetts President’s Office recently announced the launch of its Unified Procurement Services Team – a shared services project that is expected to save UMass more than $16 million in administrative costs over the first 12-18 months.
The newly established Unified Procurement Services Team (UPST) is the most recent step in the university’s ongoing efficiency and effectiveness (E&E) program that is allowing the university to direct more funds to student financial aid, academic programming, and deferred maintenance. The E&E program was first launched in 2012 to improve services while reducing overall costs. Not including the UPST initiative, the E&E program is projected to save $124 million through 2024.
“The savings realized through this program will allow us to continue making targeted, high-impact investments in the programs and facilities that benefit our students, and ultimately the Commonwealth,” UMass President Marty Meehan said. “This work is always critical, but especially so during a time of disruption across the higher education landscape. As we ask families, the Commonwealth, Congress, and donors to do their part in supporting UMass, we have an obligation to do ours through innovative and collaborative management.”
The UPST consolidates multiple procurement operations into one single unit, reducing administrative payroll and leveraging the university’s purchasing power while increasing collaboration across the Amherst, Boston, Dartmouth, Lowell and Medical School campuses and improving service delivery.
The UPST is being led by the university’s new Chief Procurement Officer, David Cho, who joined UMass this fall after serving as the Chief Procurement Officer of BlackRock, one of the world’s largest asset management firms.
The savings realized through the E&E program are achieved through a combination of cost reduction and cost avoidance strategies. Since 2012, UMass has initiated 145 projects that are projected to result in more than $124 million in avoided and reduced costs by 2024, not including the projected $16 million in savings from the launch of the UPST.
- In 2019, UMass completed a comprehensive review and evaluation of the system’s banking services resulting in annual savings of approximately $300,000, with a cumulative 5-year savings of approximately $1.5M.
- UMass awarded & implemented a new janitorial supply contract estimated at $3.5 million annually, a projected cost reduction of $580K.
- Energy supply costs have declined as have related carbon emissions per student and building square footage.
UMass has been independently recognized for its innovative management strategies with awards including:
- A Models of Efficiency Award from University Business Journal.
- Governor’s Citation as Quasi-Public Organization of the year for outstanding participation in the Commonwealth’s Supplier Diversity Program.
- Two Davis Foundation grants to support ongoing E&E projects.
This announcement follows recent affirmations of the university’s strong financial position and bond ratings by Moody’s Investors Service, S&P Global and Fitch. In their December ‘18 report, S&P cited the university’s “enterprise profile as very strong, characterized by growing enrollment, solid demand, and sound management and governance oversight, with comprehensive long-term strategic plans.”