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When budgets are tight, it’s tempting to chase the lowest upfront number… until the “cheap” option becomes expensive in year two.
Higher education Facilities and Procurement teams are balancing funding pressure, aging buildings, modernization priorities, and enrollment shifts. Every furnishing decision has to hold up under scrutiny from finance and leadership. It’s no longer enough to justify what something costs today. You must know and be able to explain what it will cost over time.
That’s where total cost of ownership (TCO) comes in.
TCO is a decision-making lens that looks beyond the initial purchase price to account for what you’ll pay across a piece of furniture’s lifecycle. It includes operating, maintenance, administrative, and end-of-life costs that often show up long after your original PO is approved.
According to Gordian’s 2025 The State of Facilities in Higher Education report, institutions face “ongoing shortfalls in the funding of needed campus renewal investments of more than 32%.” This gap underscores why furniture decisions can’t be evaluated on upfront prices alone. When renewal funding falls short, operating budgets often absorb avoidable lifecycle costs later on.
Using a TCO framework helps Facilities and Procurement leaders make furnishing decisions that protect operating expenses (OpEx), reduce operational burden, and stay defensible across stakeholders.
In this article, we’ll explore how to use a TCO lens to evaluate furniture decisions, uncover hidden lifecycle costs, and identify more flexible approaches that protect OpEx and reduce operational burden.
It may seem complex, but at its core, TCO is quite simple. The formula is:
Acquisition cost + operating and maintenance costs + labor and administration costs + end-of-life costs = true cost over time.
On your campus, those categories show up in very practical ways. Common TCO components in higher ed environments often include:
TCO creates a shared language for value for Facilities and Procurement teams because it captures what happens after the purchase is complete. In higher ed, those costs often show up as staff time, disruption, and unplanned OpEx, especially when needs change quickly.
Your furniture ownership costs may not appear on the original invoice, but your Facilities teams often experience them every day as needs shift. These hidden costs might include:
Deferred maintenance and aging infrastructure can increase these pressures, forcing trade-offs and increasing the need for predictable operating decisions.
Ownership costs can also create a ripple effect of ongoing work, like moving, storing, repairing, replacing, and coordinating services across multiple vendors. Over time, that labor and disruption adds up.
When you think about it through a TCO lens, you realize the initial price tag looks quite different from reality.
TCO is most useful when you can apply it to real-world decisions. The following worksheet approach is something your Procurement and Facilities leaders can bring into their next sourcing meeting:
Step 1: Define the Horizon
Is this a 24-month swing space? A five-year leased building? A seven to ten-year permanent lounge renovation? The answer changes the cost equation.
Step 2: List Direct Costs
These include purchasing or rental costs, delivery and installation fees, and initial setup or configuration.
Step 3: Estimate Indirect Costs
These will include labor for moving and reconfiguration, as well as surplus items. It may also include repair and warranty coordination, and end-of-life costs, like disposal or recycling.
Step 4: Factor Risk
This might look like lead-time uncertainty, enrollment fluctuations, remodel timing, and program changes.
TCO is a recognized sourcing lens used to evaluate value beyond price. The goal is to make the expensive surprises visible upfront instead of allowing them to become complicated problems you discover downstream. When your teams use this simple checklist approach, they can compare options on more than acquisition costs, and select the approach that best supports their timelines, flexibility needs, and budget constraints.
A few years ago, a major university faced a sudden housing shift, when hundreds of incoming students deferred admission during the pandemic. They returned the following fall, and the institution needed to secure additional leased residential space to accommodate the larger class. All of it was unfurnished.
Requirements evolved and changed quickly. The school had to pivot fast to find a solution. They turned to CORT, and delivery and setup were completed before move-in. Students began the semester with fully furnished suites and zero disruption.
Later, those same buildings served as temporary housing during a major renovation. Some inventory was returned, while other pieces remained in place as custodianship shifted between departments. The ability to scale up, scale down, and reallocate inventory reduced asset accumulation and administrative burden.
The point? University campuses are not static. Renovations, phased modernization projects, and enrollment shifts create uncertainty. Furnishing quickly without adding to owned inventory is, more often than not, a strategic advantage. Flexibility is often just as important as cost.
You don’t have to choose between cost control and campus modernization.
Pick one upcoming project and run it through a TCO lens to align your Facilities, Procurement, and Finance teams on a shared definition of value and to prevent “surprise” costs later.
When you plan for the full lifecycle, and not just the purchase, you create breathing room in the budget and more agility for whatever comes next.
Your team deserves a furnishing strategy that protects budgets and keeps projects moving. Explore how CORT’s Furniture-as-a-Service model can help your institution reduce total cost of ownership while creating adaptable, student-ready spaces. Visit cort.com today.
