Вы находитесь на странице: 1из 5

GROUP SAVINGS ORGANIZATION LETTER OF ENGAGEMENT

1. Scope
Alliance Cost Containment, LLC (ACC) and ______________ (known hereafter as
Client), hereby enter into this Letter of Engagement whereby ACC shall serve as a
consultant to the Client. ACC shall examine, analyze and make recommendations
associated with the Clients procurement process, offering both pre-negotiated pricing on
products and services as well as custom-negotiated cost reduction programs in expense
areas selected by the Client.
2. Term of Agreement
This Agreement and the products and services made available to the Client by ACC shall
commence effective with the signing date of the Agreement.
a. For each pre-negotiated products and service selected by the Client for its use, the
Term of this Agreement will continue indefinitely until the Client decides to terminate
use of the pre-negotiated product or service, subject to any contracts that may be
required by specific suppliers of pre-negotiated products or services and accepted by
the Client.
b. Should a supplier of a pre-negotiated product or service elect to discontinue their
relationship with ACC, or should ACC choose to terminate a pricing program with a
provider of a pre-negotiated product or service, ACC will provide at least sixty (60)
days notice to Client. ACC will also seek to replace the departing supplier with one or
equal or better quality at equal or better pricing, with any changes to new suppliers
made at the discretion of the Client.
c. For custom cost-reduction programs requested by Client, Client agrees to authorize
ACC to conduct negotiations with any and all existing suppliers related to the expense
category approved and any new vendors providing comparable products and service on
its behalf. Client agrees to suspend major price negotiations with agreed-upon
suppliers until a pricing recommendation is delivered to Client by ACC. ACC shall not
bind Client to any pricing proposals obtained by ACC without Clients written
permission and agreement. Client agrees to communicate this negotiating authority
granted to ACC for the expense category approved with all employees associated with
procurement in the affected expense area.

Page 1 of 4

3. Program Process and Deliverables


For each expense area involving pre-negotiated products and services of interest to the
Client, Client agrees to supply ACC with three (3) months of current invoices showing
items purchased and prices paid for each item. ACC will compare these items and prices
with its contract rates and prepare a report for the Client showing any new prices and
aggregate savings possible. Client will then have fourteen (14) days to accept or reject the
new pricing program offered by ACC. If the new pricing program is accepted, ACC will
then work with representatives of the Client and the successful supplier to pursue
implementation of the new pricing program.
Based on the fee structure of this program, on-going audits of savings achieved are not
included. Periodic program audits are available at an additional cost of $250 per audit of
each expense area. Should an audit of savings results in an expense area be desired by the
Client, ACC agrees to request copies of all supplier invoices from the supplier in question
for the audit period desired by the Client. ACC will compare all purchases and pricing
with purchases and pricing from the initial review and prepare an audit report for the
Clients review.
4. Periodic Reviews
ACC agrees to meet with Client at least every sixty (60) days to review program results and
supplier service, and to provide any further assistance that may be needed.
5. Fees
Other than the optional audit fees noted in Section 3, there are no participation fees
charged to the Client for the use of any of the pre-negotiated product of service programs
offered by ACC. All program management fees are paid to ACC by participating suppliers.
It is anticipated that most custom cost reduction programs that might be of interest to the
Client will also be negotiated with no participation fee due from the Client, having
program management fees paid by the selected supplier.
Should a supplier require an alternate compensation method, such as a share of savings
over a defined period of time, ACC will review the proposed compensation method with
the Client prior to pursuing program negotiations. Any alternative pricing model will be
pre-approved by the Client in writing prior to active pursuit of savings with a supplier
requiring an alternate compensation method.

Page 2 of 4

6. Non-Circumvention
The pricing programs of pre-negotiated products and services, as well as the pricing
obtained for custom cost-reduction programs, represent the work product and intellectual
property of ACC. These programs are offered to the Client at no charge with the
expectation that the Client will agree to use these programs should savings be
demonstrated by ACC to the Client. Client agrees to not share ACC pricing for a period of
eighteen (18) months with current suppliers or new suppliers as a means to negotiate new
pricing without compensation to ACC. Client agrees to inform ACC in writing as to the
specifics of any such subsequently implemented cost savings and to allow ACC to review
applicable records to determine resulting cost savings.
7. Assignment or Change of Control
Neither party shall have the right to assign this Agreement without prior written consent
of the other party, which shall not be unreasonably withheld or delayed, except that either
party may assign without the others consent to a parent, subsidiary or affiliate, or to an
entity controlling, controlled by, or under common control with the party at the time of
the execution of this Agreement. This Agreement shall inure to the benefit of and be
binding upon each party, its successors and its permitted assigns.
8. Confidentiality
ACC agrees to maintain in strict confidence all information received from the Client
concerning methods of doing business. Client agrees not to disclose details of ACCs
process, current suppliers or suppliers prices to parties outside of the Clients
organization.
Client Name

Alliance Cost Containment LLC

_________________________
Authorized Signature

__________________________
Authorized Signature

____________________________
Name

_____________________________
Name

____________________________
Title

_____________________________
Title

____________________________
Date

_____________________________
Date

Page 3 of 4

Expense Areas Approved for Review


Please insert each expense area of interest to your firm below prior to returning this Letter
of Engagement to Alliance Cost Containment. Thank you!
Expense Area

Date

Client Signature

________________

______

______________________

________________

______

______________________

________________

______

______________________

________________

______

______________________

________________

______

______________________

________________

______

______________________

________________

______

______________________

________________

______

______________________

________________

______

______________________

________________

______

______________________

________________

______

______________________

________________

______

______________________

________________

______

______________________

________________

______

______________________

________________

______

______________________

________________

______

______________________

________________

______

______________________

Page 4 of 4

Похожие интересы