07/23/10 - Important News! Office Depot announces it will not respond to LA County's solicitation for office supplies.
Statement Issued by Michael LaPierre, National Program Manager, U.S. Communities Government Purchasing Alliance:
We respect Office Depot’s decision not to respond to the Los Angeles County office supply request for proposal. Unfortunately, they have mischaracterized the supplier commitments as “new” terms. They are not new. They are the same commitments that Office Depot made in 2005 when they won the current office supplies contract with Los Angeles County. Importantly, they recently agreed to the same supplier commitments in April of 2009 when they won the schools supplies contract with Fairfax County, Virginia. Nothing has changed in this current solicitation.
Regrettably, they appear to find the strict obligations in the U.S. Communities program that are designed specifically to protect public agencies by providing a guarantee of best government pricing to be “onerous” in their words. What they have termed “onerous” we consider a high bar and until now, Office Depot has always agreed that providing public agencies with that assurance was the right thing to do. We look forward to the result of the ongoing Los Angeles County evaluation process. There are other suppliers who are participating and we fully expect that this review process will yield a result that will provide improved value to the public agencies that we serve at a time when they need it the most.
Michael LaPierre
National Program Manager
U.S. Communities Government Purchasing Alliance
Statement Issued by Rick Grimm, NIGP Chief Executive:
In the last few days there have been significant developments within the U.S. Communities program that are important to the National Institute of Governmental Purchasing and to our members; specifically Office Depot’s decision not to compete for the program’s 2011 office supplies contract being solicited by Los Angeles County as the lead public agency.
As you may know, NIGP is a founding sponsor of the U.S. Communities program in partnership with the Association for School Business Officials (ASBO), the National Association of Counties (NACo), the National League of Cities (NLC), and the U.S. Conference of Mayors (USCM). As a leading authority for public procurement, NIGP recognizes U.S. Communities as a leading national cooperative that brings a strong value proposition to the public procurement community and our members.
Additionally, NIGP has enjoyed a relationship with Office Depot for several years through our Premier Corporate Sponsor program. The company’s contributions have been utilized to offset costs (especially for the annual Forum) that otherwise would need to be covered through higher registration fees; and their support has been appreciated.
Because NIGP has a relationship with both U.S. Communities and Office Depot, and because both providers are prominent in the public procurement community, we believe it is important to fairly address Office Depot’s decision.
Earlier this year, Los Angeles County chose to forego the one-year extension option (through 2011) provided for in its office supplies contract with Office Depot. Instead, the county issued an RFP and a number of suppliers, including Office Depot, attended the pre-bid conference and expressed interest in becoming the supplier through the U.S. Communities program. Shortly before the proposal submission deadline, Office Depot made a surprising and public withdrawal from the competition.
Certainly, any company has the right to decide whether to compete for any business as part of their overall corporate strategy. However, in letters to customers and statements to the media explaining the underlying reasons for its decision, Office Depot called the U.S. Communities supplier commitments “onerous” and “different.” We respectfully disagree with this assessment.
The cornerstone of the U.S. Communities value proposition requires that every supplier must agree to honor a guarantee that they offer the very best government pricing through the program; commit to providing quality products and services; and participate in audits and benchmarking reviews. This proposition is consistent with the principles and value of public procurement: to provide the highest quality products and services at the lowest possible price. And suppliers should be held accountable, through periodic audits, for ensuring that their pricing is consistent with contractual obligations. After all, cost and price audits are standard practice in public procurement to ensure transparency and integrity of public expenditures.
It is important to note that these same rigorous contractual standards were included in two solicitations awarded to Office Depot within the last year; including the school supplies contract that was just awarded to the company in April 2010.
But perhaps even more importantly, these U.S. Communities standards are also in place for 23 other national contracts administered by lead public agencies; covering a diversified listing of commodities and services from office machines, technology and sports/playground equipment to electrical supplies and auto parts. Each of these national suppliers continues to adhere to the practice of best pricing and periodic audits.
We are confident that Los Angeles County’s Procurement Team will assess their solicitation process and will make the very best decision on behalf of their County citizens as well as the larger public procurement community. The County has received multiple proposals for the national program and will meet next week with the U.S. Communities National Evaluation Team to evaluate the proposals. A decision is expected mid-August. In the interim, the current Office Depot contract remains in force through December 31, 2010.
U.S. Communities suppliers will continue to meet their obligations to provide the very best government pricing through the program, commit to providing quality products and services, and participate in audits and benchmarking reviews. This program annually re-directs $1.6 billion in purchases that would have been solicited by individual public entities at higher costs and with great redundancy.
And we are confident that the public procurement community will assess all of its options – as they always have - and will make the very best decisions for their constituents and the entities they serve.
Your comments and questions are always appreciated.
Rick Grimm CPPO CPPB
NIGP Chief Executive
Statement Issued by Steve Schmidt, President, Office Depot Business Solutions Division:
For more than 23 years, Office Depot has proven its commitment to the highest level of service, value, and integrity for its customers, which include thousands of public agencies. As part of this commitment, we are pleased to announce the new direction we are taking to further service and improve the value we offer our public sector customers.
As you may know, Office Depot was awarded the office supplies contract by Los Angeles County in 1996, 2000, and 2005. The LA County agreement, which serves as the lead agency contract for the U.S. Communities Government Purchasing Alliance, is set to expire on January 1, 2011, and LA County is currently soliciting proposals for a new contract (the "RFP"). For the reasons set forth below, we have chosen not to submit a proposal. Needless to say, we did not make this decision lightly, and we are committed to fulfilling the terms of our current agreement through the end of the year.
We chose not to submit a proposal because the RFP contains terms that are substantially different than our prior office supplies contract. We believe these terms are onerous and inconsistent with our long-term strategies and ability to provide the best value on office supplies to our customers, including a low-price structure that customers have come to expect and enjoy. Instead, we plan to develop alternative cooperative agreements that we believe you will find exciting and allow us to continue to serve you.
We understand that the current economic climate is especially tough on our public sector customers. We want you to know that our decision is grounded in our belief that we can provide the greatest value to our public sector customers by offering full and diverse programs that will focus on choice, flexibility and deep savings. You will have the option to purchase quality products, services and solutions through one of our competitively solicited alternative cooperative contract offerings, or directly outside of a cooperative arrangement. Whatever program works for you, Office Depot will continue to deliver extraordinary value in the public marketplace and will provide you a seamless transition to the program that best meets your specific needs.
U.S. Communities is a Valued Partner
As part of our current purchasing cooperative offerings, we will still have agreements through U.S. Communities. We deeply appreciate and value our partnership with U.S. Communities and will continue our relationship through the expiration of our current Los Angeles County agreement and through our national contracts for technology and school supplies under the U.S. Communities umbrella. Through our lead agency agreement with Fairfax County Public Schools, we offer approximately 3,500 school and educational supplies. Through Tech Depot, we have a lead agency contract with the County of Fairfax (Virginia), which offers thousands of technology products to public agencies nationwide. These specialty offerings enhance our full arsenal of cooperative options and assist us in bringing significant value to public sector agencies across the country.
We Will Keep You Fully Informed
We are excited about the future and are looking forward to continuing to help you realize significant savings on your office supply purchases. We will be contacting you individually in the coming weeks to discuss the various offerings that Office Depot has available. You are a valued Office Depot customer and we will do everything we can to ensure any transition is smooth for you.
We know the public sector, we know your office supply needs, and we know how to take care of your business. We have unparalleled customer service, robust supply chain operations, impeccable on-time next day delivery, sophisticated online capabilities, and industry-leading product assortment. These successes demonstrate that Office Depot is dedicated to its partnership with the public sector, where together we continue to take care of business. To learn more, please contact your sales associate today. Additionally, should you have any general customer service questions, please contact our customer service department at 888.263.3423 (888.2.OFFICE).
Sincerely,
Steve Schmidt
President, Business Solutions Division
-
