Story of a Building Seminar: Cost Saving Strategies from Product Vendors and Manufacturers

Potential Cost Saving Strategy: Collaborative Purchasing

We heard from the Inspector General at the Story of a Building program about the value of combining purchases to save money. Increasing the volume of a purchase may lower the unit cost of the item being purchased.  Imagine combining your large classroom furniture order with another school’s large classroom furniture order for the same product line. This jumbo order incentivizes the manufacturer of the product line to sharpen its' pencil for a potential price discount. That result would work to further stretch the FF&E budgets of the participating schools.

Potential Cost Saving Strategy: Look Book

A “Look Book” concept for cost saving was shared by Jacqueline McGuire from KI Manufacturing. That is, a classroom outfitted with one manufacturer’s products. Here, a manufacturer offers furniture layouts of its own product lines for several classroom configurations priced in ranges of good, better and best. If you like the style and quality of a particular furniture manufacturer, using this strategy is often a way to afford top quality product lines. This is also an easy starting point for considering a collaborative purchase of furniture with another school district(s). We heard from this panel that increasing the volume of a furniture order may reduce the unit price of items; and combining orders of two or more school districts (collaboration) is one method to increase volume.

Potential Cost Saving Strategy: M.G.L. c.30B (Bid)

If you are using a formal bid process, it is important to create a simple, straight forward bid specification. Your specification should pinpoint functionality or other non-negotiable requirements (ANSI/BIFMA Tested, GreenGuard indoor air quality, USA-made, warranty) that you expect from the product specified. This will garner competitive responses from products of the same quality and, not, responses from just any “like” product. If a bid specification is too general, expect bid submittals from products that do not constitute the same quality/function level as the item you have specified.

If using “or equal” language in your specification, determine and write out in the specification what your criteria is for judging an item as “equal” to the item named in your specification. Determine upfront which product line items would qualify as equal to the one specified. (If a chair is 30% less in cost than the chair you have specified, it is most likely not “equal” to the one specified.) Panelists advised to be sure not to allow use of the bid process as the sole way to true-up the FF&E budget. Otherwise, all your hard work to determine preferences will be jeopardized.

The Story of a Building packet of materials included a PowerPoint presentation from the Office of the Inspector General on certain M.G.L. c.30B bidding information. The information included: the Proper Use of Proprietary Specifications, Communication with Vendors, the Rule for Award and tips for other sound bidding practices. The presentation, “Office of Inspector General Bidding Tips” is included below.

Potential Cost Saving Strategy: Utilizing Collective Contracts (State Contracts, MHEC, etc.)

Collective contracts that you may buy from without using a formal bid process often authorize school furniture vendors to provide related services. For example, MA State contract, OFF 38 Category 9 vendor services include interior design (space planning), warehousing and installation. The Panel members indicated that these considerations may be important when determining to whom to do business.