Orbis TFER operates under two principles when it investigates the price of a product. First, every library should benefit, i.e., a library should pay less as a member of the consortium than it would as an individual subscriber. Second, the product should be priced so it is as affordable as possible for all interested libraries.

Vendors use various methods when pricing their products for consortia, e.g., FTE, IP classes, concurrent user, journal holdings. In some cases, the pricing method is vague or unspecified. Using the vendor's quote does not always allow the consortium to achieve its two goals. Most consortia use some method of cost distribution to achieve greater equity and wider access.

The 20% constant or base helps to achieve the first principle. It also matches what Orbis is doing now for other allocation formulas. The constant helps to "collapse" the range slightly, e.g., the largest libraries pay a little less and the smaller libraries pay a little more. Without the constant, the largest libraries could end up spending considerably more and the smallest libraries would save a relatively small and less consequential amount.

It seems most equitable to use both FTE (potential use) and the materials budget (ability to pay) to figure the remaining contribution. Using both helps to ensure that the two principles will be met. For example, if the remaining contribution were based only on FTE, it is likely that several of the regional public institutions would not be able to afford the product. If it were based only on materials budgets, several private institutions could pay more than they would on their own.

Orbis-TFER discussed several models of cost distribution. There was widespread support for factoring in a constant (or base), FTE, and materials budgets¹.

• 20% of the cost be distributed equally,
• 40% based on FTE,
• 40% based on materials budget

This model should be used only when it achieves the two principles. If not, the group should remain open to another distribution.