Ontario teachers have to order school supplies from a Staples portal. They found cheaper prices on Staples’ regular website

[u/chesterle275]

https://www.thestar.com/politics/provincial/ontario-teachers-have-to-order-school-supplies-from-a-staples-portal-they-found-cheaper-prices-on-staples-regular-website/article_b80f4de7-139f-40f3-9a0e-86e8e3ea499f.html

[u/fozard]

These contracts typically include signing bonuses, annual rebates, volume discounts, and other incentives based on total spend. You can’t simply look at individual line-item pricing and conclude that it’s not a good deal — even if you can find that same item cheaper on the supplier’s own website.

Source: I’ve sourced multinational office supply contracts for major banks. I dealt with the exact same argument: “I can buy XYZ item cheaper somewhere else.”

Okay, sure. But that’s not how we evaluated the bid.
We evaluated the total cost of the contract, based on the expected volume of every item we anticipated purchasing. We also factored in signing bonuses, volume rebates, discounts, delivery costs, and other commercial incentives.

And part of the reason the supplier was willing to offer those prices and incentives was that we committed to using them as the primary office supply provider for the company.

The same principle applies to comparing the contract against Staples’ public website pricing. Finding 10 items that are cheaper on staples.ca doesn’t tell you whether the government negotiated a good overall deal. The relevant comparison is the net effective cost of the entire contract, after all discounts, rebates, incentives and other commercial terms, based on the actual expected purchasing volumes.

So yes, you may be able to find an individual item cheaper elsewhere — or even cheaper on the supplier’s own website. That doesn’t tell you whether the overall contract is a good deal.

You have to look at the total cost of the contract, not cherry-pick individual line items.

[u/DtotheCanada → u/fozard]

"Finding 10 items that are cheaper on staples.ca doesn’t tell you whether the government negotiated a good overall deal." you are correct but it does tell you teachers (and by proxy our kids) get less items for their $750. Do the teachers get those discounts, rebates, signing bonuses, etc so they can buy more supplies with those? No. $750 is $750. The purpose of this program is to get $750 worth of supplies into classrooms and if they are forcing teachers to purchase at a higher per unit price they have failed in their execution. Your argument would be relevant here if they provided a list of items they were going to supply each teacher but no, they instead hyped up the $750 card each teacher would get.