Quality vs. Price: Going Through Procurement

Good Deals

Despite its role as “middle man,” procurement can have a positive effect on workflow. Fox says her firm uses its procurement department to avoid legal or ethical missteps.

“Ernst & Young is in a regulated environment, so we have regulatory restrictions and those we impose upon ourselves regarding our relationships,” she says. “Our relationship [with the procurement department] is not necessarily based upon managing cost. While we are cognizant and sensitive to what we spend, it has been established more as a check-and-balance to maintain independence in relationships and manage how we work with our vendors.”

Procurement does manage to negotiate some volume pricing on a national level, she says, but it also exists to prevent any deals that smack of impropriety. When a vendor is also a client, the firm needs to be sure it’s not getting a different pricing structure than anyone else offering the same volume would receive.

All this helps Fox do her job faster and with fewer roadblocks. “We do [request for proposals] with larger opportunities or larger projects,” she says. “But if we’re doing a small event, our procurement group has already established small contract relationships with specific hotels. There might be a group of five or six in the Twin Cities that they would recommend we would work with. So that’s already been executed for us; the legwork and the screening have already been done. It’s easier to get the event rolling.”

Over time, some established planner-vendor relationships can fall into a rut. Planners may begin to wish they had a little more leverage in order to get better service or pricing. Being required to get new bids on the job can actually be a blessing in disguise.

“They could use the procurement department to help them negotiate and still maintain a strong relationship,” Trembath suggests. “They could use [procurement] as the ‘heavy’ to talk to someone they’ve been working with for a lot of years. And by doing so, they know the vendor is going to come back with the best price.”

The best-case scenario is a procurement department that can help a meeting planner save   money and demand the best service, yet understands that the planner has valuable expertise to contribute. When a true partnership is forged, both parties look good, and the company benefits.