Line-item versus prime vendor purchasing.
Data from four vendors indicated that purchasing from a prime vendor decreased food cost by 2.5%, as compared with the line-item bidding system. However, the range for prime vendor purchasing was from 2.5% lower than line-item bidding to 8% higher. Thus, if a thorough evaluation of purchasing systems is not conducted, prime vendor purchasing could increase food costs. Purchasing from a prime vendor also reduces administrative and inventory costs and improves the quality and consistency of food purchased. There is a need for thorough evaluation and documentation of purchasing systems. The effectiveness of a purchasing system is measured by its ability to reduce cost while adhering to established guidelines. This article has presented general information obtained from a comparison between line-item and prime vendor bidding for a 104-bed hospital in Georgia.
D003132:Commerce; D005521:Food Service, Hospital / Q000191:economics*; D005845:Georgia; D006744:Hospital Bed Capacity, 100 to 299; D011682:Purchasing, Hospital / Q000379:methods*