A supplier partnering agreement Essay

1125 Words Oct 23rd, 2014 5 Pages
A Supplier Partnering Agreement at the University of Las Vegas

Introduction The supplier partnering agreement at the University of Las Vegas case reflects the initiative of the Nevada Office Supply Company (NOSC) to become the sole supplier of office goods, not only to the University, but also to all state institutions involved in education. NOSC already is a major supplier to these institutions with approximately 50% of the business, and has provided competitive prices, good quality and service in the 15 years the company has been present in the industry. NOSC wants to go beyond and take the full 100% of the business by offering the University a series of incentives in the form of discounts and rebates. NOSC doesn’t want any
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NOSC’s proposal, which ultimately persuades Mr. Bob Ashby not to perform a regular bidding competition process, has the potential to be illegal. Under the Sherman Act of 1890 any type of agreement or conduct that restricts trade and destroys competition, is considered illegal. “The Sherman Act rests on a legislative judgment that ultimately competition will produce not only lower prices, but also better goods and services. Section 2 stands as a vital safeguard of that competitive process. Individual firms with monopoly power can act anticompetitively and harm consumer welfare. Firms with ill-gotten monopoly power can inflict on consumers higher prices, reduced output, and poorer quality goods or services. Additionally, in certain circumstances, the existence of a monopoly can stymie innovation” ("Competition and Monopoly: Single-Firm Conduct Under Section 2 of The Sherman Act" 10-11)

Even though both parties have a potential gain in this agreement, the fact that NOSC is requesting to be the education system’s sole office supplier in the growing area of Las Vegas and the State of Nevada, and most likely wants to eliminate some of the competition, makes it an illegal and unfair act against the other suppliers. The true meaning of a free market economy arises from acts that lead to healthy competition, cost reduction and better product quality. It is likely that if Mr. Ashby brings to the table other suppliers, they may be able to match or even

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