There’s been some debate in the press this week about Washington DC’s $16 muffins at a conference, which ended up actually being $14.29 for a continental breakfast and facilities rental at a DC Hilton. A Bloomberg article (see http://www.businessweek.com/magazine/revisiting-the-16-muffin-09292011.html?chan=magazine+channel_news+-+politics+%26amp%3b+policy) goes onto to say that continental breakfasts can be even more expensive – more than thirty dollars – in New York City. Ah time to bash the government again, right?
Well I for one think we may be grossly oversimplifying with “analyses” like this. It’s very well known in the hospitality industry that hoteliers play games with how they bucket pricing, and those buckets are configured to present as low as possible a price for the items that are listed in an RFP. For example, you take any standard travel booking engine, search for a hotel, and what comes up? The basic room night. I’ve lost count personally of how many fabulous $149 dollar rooms I’ve stayed in (cheap room rate for a large city!) but found $15 bowls of oatmeal, $5 cups of coffee, $12 internet fees and $17 movies. For fees like that, hotels can almost give away the room free. But since the travel engines present hotel room prices, not the average per night bill travelers pay —- well you can’t blame them for pricing this way. The point is that from a TOTAL COST point of view, was it reasonable?
I don’t know if this is the case with the “Hilton headliner.” But it does bring up the interesting point in procurement of how important it is to make well-formed bids. So, in other words, if you are buying internet connections and facility space and coffee and muffins – don’t make a contract award based just on the price of muffins. I’m not saying our federal government is best in class for buying, but I think before we bash them or anyone else we should at least get the facts right!
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