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 user 2009-10-16 at 10:38:43 am Views: 59
  • #22454
    group of New Jersey office supply companies that stands to lose
    millions in government business is suing the state, trying to block its
    new exclusive contract with Staples.
    The state’s office supplies
    contract, worth about $10 million, shifted from 17 individual contracts
    to Mass.-based Staples Advantage on Sept. 1.The move will save the
    state about $2.25 million and could also generate savings for
    municipalities, counties and school boards that choose to purchase
    office supplies through the state contract, according to the state
    Department of Treasury.

    But New Jersey members of the National
    Office Product Alliance are seeking to put the new contract on hold,
    claiming the decision to go with Staples was based on an unfair
    analysis of product costs that favored the larger company.“We have been
    put at a severe disadvantage,” said Steven Gerzberg, president of
    Johnson Business Products and Interiors of Secaucus. “One has to
    question the competitive nature of this contract.”Even if the state
    will save the money it claims it would by going with Staples, the move
    will mean more lost jobs and tax revenue, representatives of the New
    Jersey companies said during a news conference held yesterday in the
    State House.“We’re going to cut our workforce,” said Sonny Arora, owner
    of Action Office Supplies in Lakewood.“That’s the reason that we need a
    stay,” said Allan Feldman, owner of South Plainfield’s Able Office

    The state announced the deal with Staples in August,
    saying the move will save an estimated 23 percent off the annual cost
    of purchasing office supplies, which is about $10 million. The contract
    was awarded through the National Joint Powers Alliance, a consortium of
    28,000 government units seeking better deals from vendors.A 2006 New
    Jersey law enabled the state to join such out-of-state cooperative
    purchasing consortiums to seek savings on goods and services if the
    contracts are competitively bid. The state is joining in the last year
    of a five-year contract with Staples that was competitively bid in 2005
    by the consortium.Because Staples will ship products directly to state
    agencies, state officials believe the new deal will save another
    $500,000 by closing warehouse space it has been leasing to store office
    supplies.The Department of Treasury issued a statement saying it
    disputed some of the price comparisons put out by the state-based
    companies and also said the Staples deal does not prevent the companies
    from competing for work at the local level.“The new contract in no way
    impedes the handful of vendors who have been under contract with local
    governments to continue to compete for this office supply work and
    service these governments now and in the future,” the statement
    said.Last year, the state decided to go with Tenn.-based AutoZone for
    its auto parts supply contract instead of the 135 individual New Jersey
    dealers that had been supplying parts under the old deal. The new
    contract, which was opposed by the in-state businesses, was estimated
    to save about $2 million.
    Officials stand by state’s contract for office supplies
    But vendors say bid process was unfair, claim to offer lower prices
    a group of New Jersey businesses still objects to the state’s
    participation in a national office-supply contract, state officials say
    this contract and similar national cooperative contracts benefit
    taxpayers and small businesses.The office-supply contract is the ninth
    multistate cooperative agreement that the state has signed since the
    Legislature authorized them in 2006. The contracts range from an auto
    parts deal with AutoZone to an industrial supplies contract with
    Grainger.Several of the office-supply businesses and Assemblyman Jon M.
    Bramnick (R-Westfield) have asked why the businesses weren’t able to
    bid on the contract. The group filed an appeal in a state court Sept.
    25, asking to overrule the contract awarded to Staples Business
    Advantage.On Aug, 17, the state announced the agreement with the
    National Joint Powers Alliance to buy Staples products, saying
    taxpayers would save roughly $2 million annually from the pact.While
    the companies say they can compete with Staples’ prices, state
    officials dispute whether the local vendors offer lower prices. A
    Treasury spokesman provided a list of roughly 450 items for which
    Staples generally offered lower prices than New Jersey vendors. The
    suppliers contend their list of 10,000 products shows Staples has
    higher prices for similar products.

    Chatham Superintendent of
    Schools Jim O’Neill expressed concern that the contract would mean
    Staples would have no competition, and said Staples’ prices were
    unclear.Given the projected savings and the ability to offer discounts
    to small, minority- and women-owned businesses, the deal is a “home
    run,” Treasury spokesman Thomas Vincz said. In addition to businesses
    registered with the state, local governments and schools also will
    receive discounts from Staple.Alliance national sales manager Duff
    Erholtz said anyone can compete for the contract, which is up for
    renewal next year, but they must be able to serve the entire country.
    The New Jersey vendors are asking the state to put the portion of the
    contract within the state out to bid.Vincz said the cooperative
    purchasing agreements run counter to a culture that forces the state to
    overpay. He also said the bill allowing the state to join multistate
    purchasing cooperatives drew virtually unanimous support because of the
    potential for savings.

    While local governments must use Staples
    if they want the state’s discounts, they can seek other vendors through
    competitive bidding. Ocean County Freeholder Joseph H. Vicari said the
    county would seek bids and explore breaking its office supplies into
    separate contracts for which local vendors could compete.“What we’re
    looking for is not only the price, but the quality of the items,”
    Vicari said. Some of the New Jersey office-supply business owners have
    said they would go out of business if they lost their government

    Small businesses are not excluded from participating
    in cooperative purchasing contracts, he said. For example, the state
    auto-parts contract with AutoZone prompted some auto-parts sellers to
    become AutoZone dealers, Vincz said.Staples will hold a “vendor day”
    Oct. 20 for small, women- and minority-owned businesses. These
    businesses are eligible to purchase office supplies they need from
    Staples, on the same terms as the state.