New supplier contracts estimated to save over $800,000 per year for KU

LAWRENCE — New contracts negotiated as part of the Changing for Excellence initiative at the University of Kansas will lower costs by as much as $875,000 per year. Four new agreements have recently gone into effect, two of which also include one-time financial incentives totaling $2.7 million for the university.

"Changing for Excellence is all about finding areas of opportunity to reduce administrative costs and operate more efficiently," Provost and Executive Vice Chancellor Jeffrey Vitter said. "In order to achieve the goals of our strategic plan, we must better direct our resources toward research and education. These agreements represent a big 'win' as we transform the way KU does business."

The new agreements are in areas targeted as part of the procurement business case developed in partnership with the Huron Consulting Group last fall. That report identified opportunities for new supplier agreements in six areas, with a key emphasis on creating joint contracts for KU and the Medical Center (KUMC). By July 1, four new agreements will be in place. Negotiations are ongoing for the two remaining contracts.

The four agreements are:

• A joint seven-year agreement for KU/KUMC with Staples for office-related products effective June 25
o Current spending: $2.67 million per year
o Forecast annual cost savings: $240,000 per year
o The new agreement also includes a one-time $2.1 million financial incentive

• A joint six-year agreement for KU/KUMC with Fisher Scientific for scientific supplies effective July 1
o Current spending: $5.255 million per year
o Forecast annual cost savings: $280,000 per year
o The new agreement includes a one-time $600,000 financial incentive
o Volume incentives could increase total savings by up to $400,000 over the term of the agreement

• An annual renewable agreement for the Lawrence campus with Dell for desktop and laptop computers effective June 25
o Current spending: $2.26 million per year
o Forecast annual cost savings: ranging from $210,000 to $330,000 per year

• An extension of the current Lawrence campus agreement with Unisource Document Products for multifunctional devices for printing, copying, scanning and faxing effective since June 1.
o Current spending: $1.035 million per year
o Forecast annual cost savings: $25,000 per year

"The goal is to create benefits for both campuses through a collaborative process," Associate Vice Provost Barry Swanson said. "These new agreements represent our first steps in reviewing all of our major purchases to find potential for lowering costs. Achieving this level of annual savings is exciting for both campuses, but it is also the first step of the process. As we fully implement Changing for Excellence, additional savings will be generated by placing increased focus on developing core lists and standardizing equipment and supplies utilized across the enterprise."