“The total price of a product or service is a key factor in any purchase, and is something that needs to be disclosed to consumers upfront,” Mr. Corbett said. “Any business intending to collect an added fee for fuel or energy must disclose those charges when they advertise their prices.”
Consumers and businesses base their purchase decisions on the price information at hand. Finding out later that you chose the wrong supplier, store, etc. because the one you chose charges hidden fees is an unfair situation to be in.
One of my biggest frustrations in the early part of my purchasing career was dealing with those “over-and-above charges” that somehow never were mentioned in a response to an RFP, but seemed to show up in an invoice as if they were quite expected and common.
I learned to minimize these occurrences through RFP language, negotiation questions, and contracts. In one crazy situation when I was buying aircraft component maintainence outsourcing services, there was an unbelievable amount of discussion between myself and a prospective supplier over the contractual definition of “severe damage.”
Basically, if a component qualified as having “severe damage,” the supplier had the right to charge more than its contractually-agreed fixed cost for the repair to that component. Well, obviously, my company wanted the frequency of severe damage diagnosis to be rare. The supplier wanted it to be applicable on seemingly every occasion.
We decided to do a pilot program with the supplier and that really exposed the differences in opinion on what severe damage was. We ended up actually choosing another supplier after it became clear that the first supplier had its eyes on frequent “over and above charges.”
The contractual relationship with the second supplier went great. Perfect quality, 100% on-time delivery, and never an over-and-above charge.
I’m glad that the government is coming to the aid of consumers to protect them from over-and-above charges.
But for us B2B buyers…we’re on our own to a certain extent. We have to be smart about really capturing total cost when we get proposals from suppliers. A “No Fuel Surcharge” clause in your RFP templates and contract templates may not be a bad idea.
To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
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