Ohio University officials led an Inter-University Council team responsible for crafting a five-year agreement with JPMorgan Chase to provide purchasing card services to the University System of Ohio -- a deal which will result in a significant increase in purchasing card rebates for member institutions.
The unprecedented agreement leverages the group purchasing power of all Ohio public universities and 24 community colleges. Currently, members spend some $250 million a year using purchasing cards. By joining together, the universities will recoup bigger rebates based on total dollars spent.
Ohio University, which has an agreement with American Express that will expire in October 2011, is currently in the process of moving the procurement of items that cannot be purchased with the current cards to JPMorgan Chase accounts.
Individual employees will transition to JPMorgan Chase MasterCards beginning in January 2010. University Business Services expects that all employees will have the new cards by the end of spring quarter. Once individuals have made the switch, the university stands to receive an additional $132,990 per year in rebates.
Purchasing Card Administrator Shannon Bruce noted that the MasterCard transactions will be reconciled in Concur.
Click here for details about when individual planning units will transition to the new cards.
Ohio University had led the effort earlier this year to find a purchasing card provider. Bruce and Contract Administrator Rusty Thomas, along with procurement officials from Miami University and Bowling Green State University, evaluated proposals from seven companies before forwarding their final recommendation to the Inter-University Council Purchasing Group.
Mark Hopton, assistant vice president of University Business Services, said market conditions are ideal for this type of endeavor, because banks are looking for safe investments in a volatile economic climate at the same time that universities are searching for innovative ways to increase efficiency and leverage their purchasing power.
JPMorgan Chase emerged as the clear frontrunner not only because it offered a significantly higher rebate rate, but also because the institution handles more card volume overall and reported higher customer satisfaction than its closest competitors. The agreement stands as an example of positive collaboration that will benefit all of the institutions involved.
"It?s important that we make an impact in a collaborative fashion to meet the guidelines established by the Chancellor?s office and the Board of Regents," Hopton said. "This is something that every school agreed to come into. That has never happened before."
These projects are all part of a state and university-wide goal of saving money and finding efficiencies through strategic purchasing initiatives.
"The University System of Ohio is finding more opportunities to be more efficient every day," Chancellor Eric D. Fingerhut said in a news release. "I applaud the Inter-University Council?s purchasing group and the procurement staff at Ohio University for leading this effort that will help the University System focus its resources on serving students."