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best price strategy

A best price strategy is a means by which an institution ensures it receives the best market price for everything it purchases, even on longstanding contracts. It is particularly important in signal infrastructure purchasing where prices go down drastically over time, and where exact functional equivalence may be hard to establish without testing. A typical such strategy involves:
  • bid response pricing that represents a maximum, not also a minimum, price level for any volume of the same product and/or service quoted in the RFP and tracked via the strategy:
  • just in time prices that are continously aligned with current best pricing available in the marketplace for the identical products and services - whatever "identical" means
  • guarantees that the purchaser receives the benefit of lower prices in respect of any orders filled or placed, even if the equipment or service has been ordered - but not delivered
  • secure web pages provided by vendors to permit frequent checks by purchasing agents
  • default presentation of baseline configurations as specified in Request For Proposal documents, so that agents do not have to adjust these to their own needs to do comparisons, but can instantly see the prices on these configurations upon login
  • prices updated within one business day of effetive day of any change, and reflect public sector pricing schedules, volume based discounts, and ANY SPECIAL DISCOUNTS/OFFERS/CLEAROUTS offered to any other customer
  • a guarantee that the prices proposed are equal to or lower than the lowest prices charged to any of its customers for products and/or services of like quality and quantity
  • an undertaking in writing that the costs of the above are already part of any bid and that nothing additional can be charged for enabling this best price strategy

only applies between interoperable parts


As noted above, a major issue is the definition of "identical". Without functional models of the equipment or services concerned, it is actually impossible to tell if additional expenses are involved. For instance, a computer video card could need a new driver, which might require install into an existing boot image at some cost, plus risk to boot image control regimes. These are not thus "identical" to cards that require no such changes. To facilitate a best price strategy requires a very clear set of standard interfaces defined usually by industrial consortia that agree to tests that guarantee that equipment is interoperable.

only applies between interchangeable services


Furthermore a best price strategy for services requires additional work to find the handoffs and interfaces between the services in the service economy that arises around the particular infrastructure that is put in place or maintained by the bid. For instance in a green building project this will require some map of the sustainable trades involved, quality management standards like ISO 9000 to vet job descriptions, etc.. In quality management for government the Public Service Commission, CUPE and other public sector unions may need to be closely involved to help define the services and skills that actually are "interchangeable".