As reported earlier, New Jersey recently entered into an exclusive contract with Staples to provide office supplies, which many local businesses were upset by. In a posting on NJBiz.com, the state has been seen to uphold its decision to proceed with the risky single-source contract:
While the companies say they can compete with Staples’ prices, state officials dispute whether the local vendors offer lower prices. A Treasury spokesman provided a list of roughly 450 items for which Staples generally offered lower prices than New Jersey vendors. The suppliers contend their list of 10,000 products shows Staples has higher prices for similar products.
Chatham Superintendent of Schools Jim O’Neill expressed concern that the contract would mean Staples would have no competition, and said Staples’ prices were unclear.
The locals bring up a valid point: while Staples may be able to provide lower prices on paper for a handful of items, there’s simply no substitute for the free competition of multiple vendors. Also, if Staples is hiding anything in its pricing policies, odds are good that the state will lose millions before they ever find out. New Jersey is playing with fire here, and it makes me sad that the little guys are the ones who get burned.