Summary

The Los Angeles County Office of Education (LACOE) has awarded a competitively bid contract for office supplies to Corporate Express. Pricing is highly aggressive compared to other office supply contracts in California, beating benchmarks by at least 6 percent and more for like items. Used as a whole, this contract will reduce total cost of ownership for districts and county offices of education who make it the contract of choice for office supplies. Nearly 700 of the most commonly used office supplies for schools are listed and are clearly bid protected. They should constitute nearly 80 percent of what any district or county office of education would order in the office supply category.

All California school districts and county offices of education are eligible to use the contract and are specifically identified as potential users in the bid documents.

Commodity Overview

Growth in the core office supply business remains relatively flat in North America, so the major players in office supplies are using new techniques to increase profits, including private label and house branding of many supplies and the recycling of ink and toner cartridges. Emphasis on marketing is now on "supplies for the office" instead of "office supplies." As a result, the number of products offered by the major Big Four office supply companies is expanding with forays into janitorial supplies, paper, technology and custom imprinting. Paper continues to be the item with the greatest price volatility.

All prices in this bid are capped for the life of the contract. This bid continues to focus on core office supplies, with slight overlaps on ink, toner, paper and a few instructional supplies, such as construction paper. EdBuy and LACOE have a separate contract with Southwest School Supply for instructional items such as construction paper.

The Big Four: Corporate Express, Staples, Office Depot, and Boise Cascade/Office Max all have the capability to serve schools in California, while tier-two suppliers nip at their heels with lower overhead, but with more limited capabilities. Studies by consultants such as Copernicus Marketing continue to reveal that consumers see little product differentiation among office supply brands, so that price becomes a leading determinate of their buying decision. Recent news in the office products industry has centered on the announcement by Boise/Office Max that it overstated its earnings for 2004 and that some employees had falsified documents to obtain promotional payments from an undisclosed vendor in 2003 and 2004. An investigation by the Security and Exchange Commission has been launched.

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