Itemized contracts from vendors?

[cycleman77]

I am part of the mainframe support team for an insurance company in Massachussetts. Is anyone aware of a law (state or federal) with regards to requiring vendors to identify exactly what you are paying for an how much?

Since I'm not involved in contracts, I've asked a number of individuals here (ranging from manager to contracts consultant to team rep) about asking a particular vendor if they could tell us how much we are paying for a piece of software that is included in a bundle. By bundle, I mean group of software; we license a number of software solutions from this vendor and I want to know about one in particular.
Everyone I ask just shruggs and says 'they probably don't have that info', 'they wouldn't tell us', or 'there is no way to know for sure'. I'm getting no traction what so ever. I don't even know if those individuals bothered to ask the vendor or if they are just trying to shut me up.

I tried looking up consumer protection laws for Mass., but nothing seemed to apply. Maybe I'm using the wrong term?

Thoughts? Advice?

-Thanks
Frustrated peon

 

[skimple]

I don't work in MA, but I have done contracts both within the US and Internationally. The vendor is under no obligation to provide you details about their cost. They do not have to reveal how much profit they make, or what their expenses are. Frankly, its none of your business how much profit they make.

You may feel that you are paying too much for all of it, or for just a part of the package, but that is how this vendor chooses to price it. Chances are that he/she makes huge markups on some pieces, but very little markup on others. That is why they bundle. They can secure their overall profit by bundling high margin pieces with low margin pieces.

You can always ask for a separate quote for just the piece that you are interested. They may or may not choose to respond to this quote. But you can be assured that if they do quote it, they will be making money on it. That's why they are there and how everyone gets paid - including your employer.

 

[cycleman77]

Thanks skimple.

I don't care how much they are making, I'm interested on what we are actually paying.

Since the software is bundled, it is making it that much more difficult to price compare to competitors. We are probably not paying list price, but that is the only real number I have to go on.

Competitor A can come in and say they can beat the in-house vendor by 50%, but for all we know, the bundled price is already 50% of the list price. So regardless of the promo that a competitor offers, we will never know if we can save money or not. Unless of course, the in-house vendor what we are paying for the piece of software (or atleast what percentage of the bundle the particular piece of software costs).

Still frustrated, but that does help me understand a bit. Thanks again skimple.

 

[FoBoT]

if you work at a 'large' corporation, nobody will care. if they are paying $XXX,XXX per year to that vendor for a range of software/service/maintenance, nothing will change unless a 'golden child' creates a project to replace it with some other vendors equivalent

this type of thing only happens when a 'golden child' sees an opportunity to use a project like this to climb the corporate ladder

good luck OP

 

[ch33zw1z]

This really depends on your vendors. If you explain to your current vendor that a competitor is providing the same solution at a lower price and wants you to switch, that will lead to negotiations on the bundle as a whole.

Does it really matter if you know exactly what one piece costs, or that you save money?

When a vendor comes in to undercut, they're doing it based on info their have acquired or are guessing at. No real way to tell but to make both vendors quote it out for you.

edit: I can tell you this for certain, you always will get what you pay for...

 

[cycleman77]

if you work at a 'large' corporation, nobody will care. if they are paying $XXX,XXX per year to that vendor for a range of software/service/maintenance, nothing will change unless a 'golden child' creates a project to replace it with some other vendors equivalent

this type of thing only happens when a 'golden child' sees an opportunity to use a project like this to climb the corporate ladder

good luck OP

The company isn't 'large'. There is a multi-year goal to cut IT spending; real shocker, right?

I'm not trying to be a 'golden child'. I have to support/maintain the software in question and it's a pain in the ass. It's too "bulky"; too many individual pieces. My main goal is to get a better tool. The reduced price arguement is for management's sake. It's hard to make a case when it costs them more money than they are spending now.

 

[NiteWulf]

When renewal time comes around, RFQ the bundle without that software and note the difference. Kind of like skimple's suggestion.

 

[cycleman77]

Does it really matter if you know exactly what one piece costs, or that you save money?

Well one leads to the other, right? If I know what it costs from vendor A, then (in this case anyways) I can use vendor B's promo to get it for less.

When a vendor comes in to undercut, they're doing it based on info their have acquired or are guessing at. No real way to tell but to make both vendors quote it out for you.

Yea, I think I'm going to have to push some more buttons for this one...

 

[Phoenix86]

"I'm really interested in <their product> but I need an itemized quote like your competition is providing so I can justify the expenses to the project leaders."

 

[twinrider1]

It can affect how you expense the costs. A lot of variables, but in some cases software is depreciated like a capital asset and other times you eat it all in one bite.