The best way to manage office supply contracts is before they’re signed. Once a contract is approved and signed, trying to protect against fund loss through overcharges and unnecessary price increases is complicated. Recovering losses—which can be hundreds of thousands of dollars in larger hospitals—is a laborious, yet necessary process.

A Process for Managing Office Supply Contracts

Defending against fund loss should start before the contract is approved. The following process can help ensure your organization does not lose funds on routine contracts, like those for office supplies.

1. Survey the Purchasing department to identify what items departments are buying before creating a core item list with the vendor. The item list, which provides firm pricing on common office supplies, is usually the focus of office supply negotiations. However, additional savings may be had by negotiating better pricing on high-use products.
2. Negotiate discounts for better savings on the higher volume or high dollar categories.
3. Require vendor notification for discontinued items on the core item list and substitution of comparable items at the same pricing. Without this stipulation, similar products may be purchased at higher, non-core list prices.
4. Require Purchasing personnel approval on price increases before products are ordered. This prevents unknowingly paying higher prices due to vendor price increases or substitutions of more expensive products.
5. Outsource an office supply recovery audit to determine if financial loss has occurred and recover any lost funds. Completing these audits is tedious and time-consuming, often taking over a year to complete by well-trained staff. The reward, though, can be recoveries in the six-figure range.

Overcharges are not uncommon over the life of a contract. However, finding them and getting reimbursement is challenging and tedious. The Audit Group’s experience with hospitals and health systems across the country has resulted in millions of recovered funds. Contact us to learn how our Discovery Review can find recoveries and prevent future losses for your organization.