Contract that says vendor must be price-competitive may give hospital an out.
A hospital has a long-term contract with a supplier for all of the hospital's requirements of certain items at set prices. The contract has three years yet to run. The contract has a clause saying that the supplier will remain price competitive. The hospital's materials manager learns that, by joining a group purchasing association for all of a large number of items, the items covered by the long-term contract can be purchased at better prices. The supplier refuses to release the hospital from the long-term contract. In this dialogue, Dr. Decker discusses the legal issues raised by this situation and makes some suggestions for dealing with the problem.
D003284:Contract Services / Q000331:legislation & jurisprudence*; D004465:Economic Competition / Q000331:legislation & jurisprudence*; D004467:Economics / Q000331:legislation & jurisprudence*; D005376:Financial Management / Q000331:legislation & jurisprudence*; D011682:Purchasing, Hospital / Q000331:legislation & jurisprudence*; D014481:United States