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 user 2009-10-16 at 10:37:59 am Views: 99
  • #22774
    A 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 Products.

    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
    While 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 customers.

    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.