10 Jul Case Study: Contract Negotiations, RFP Preparation
A large non-profit wants to analyze and lower operating costs in several spend categories.
The Executive Director wants to do an evaluation of the procedures in place regarding the contracts with vendors and procurement practices. They have a multimillion dollar budget and they need to make sure they are acting in the most fiduciary way.
After meeting with a senior partner of OTP it is agreed that OTP will review various expense categories. OTP’s analysis of invoices and terms of contracts reveals that in most cases the non-profit is not receiving the best solutions or pricing. The partner discovers that many departments have a lax system 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 are put in place and there is an across the board improvement in the lowering of operational expenses. The non-profit in the first 6 months saves over $100,000 by utilizing the new RFP procedure and the expertise of the OTP senior partner in the area of contract negotiation.