10 Jul Contract Negotiations, RFP Preparation
Large non-profit wants to analyze and lower the operating cost associated with various contracts already in place.
Current State and Challenges
The Executive Director wants to do an evaluation of the cost, terms and procedures in place regarding the contracts with vendors and their related procurement practices. They have a multi-million-dollar budget and they need to make sure they are acting in the most fiduciary way.
OTP meets with the client to review various contracts. OTP obtains copies of invoices/contracts related to the expense categories and analyzes their cost, terms and arrangements. This analysis reveals that in most cases the non-profit is not receiving the best solutions or pricing. OTP discovers that many departments have no system or process in place to renew or negotiate new contractual needs with vendors. The team from OTP implements a new RFP procedure to promote more competition from the vendors.
The Executive Director has a senior management meeting to focus in on OTP’s findings. Stringent controls and a good process is put in place moving forward. The non-profit realizes a saving of over $100,000 in the first year of the new contracts’ implementation and saves over $500,000 by instituting sound procurement policies and procedures with the assistance from OTP.