Penfold’s base (Credit: Yahoo Australia)
A cartridge supplier questioned the country’s tender process for cartridges, claiming rules were changed after the process won by Staples and Office Max, who offered remanufactured cartridges despite the agreement being for new cartridges.
Yahoo Australia and ABC have both reported on Adelaide-based supplier Penfold WC, which is complaining that the Australian government’s tendering process for printer cartridges was unfairly changed after the process concluded, allowing US giants Staples and Office Max to offer remanufactured products at lower prices.
Remanufactured cartridges were not included in the original tender, according to Penfold, and the company states the rules “were changed after the deal went through”, allowing Staples and Office Max to provide the government with cheaper remanufactured products instead of the OEM originals as per the tender agreement. The company noted that “valuable income and jobs are going down the drain” as a result.
Penfold noted in turn that it could have supplied the exact same products “at almost a third of the cost, but was never given the chance”, with 15 members of staff now facing unemployment as a result of cost-cutting, as well as production being outsourced to the Philippines.
Penfold’s Managing Director Greg Barraclough stated: “How can it be a competitive tender process when we were only allowed to quote on original toner cartridges? They’ve quoted below cost on a lot of items and then they’ve come in with substitute products.
“They’re now selling a remanufactured cartridge to the Government for AU$150 ($135/€101) […] we could have sold that cartridge for AU$60 ($54/€40). We weren’t allowed to quote on remanufactured cartridges, so we were knocked out. We employ 95 staff to keep the business going. We’re going to have to cut back to probably 80 staff.”
Employee Maria Thornton noted that she would have to be “looking for a new job soon, [and] in today’s market I’m going to be finding it hard”, and Independent Senator Nick Xenophon has taken on Penfold’s case, contacting the Australian Competition and Consumer Commission (ACCC) and revealing research that showed Office Max “did the same thing” in California, costing local governments there almost AU$400,000 ($360,008/€269,557).
The Australian government responded to the claims by stating that “nine out of ten purchases” under the tender agreement are for new cartridges. The developments hark back to the recent toner cartridge scandal that afflicted Australia last year, where many government employees were found to have paid too much money for cartridges in exchange for gifts.
The scandal forced the government to come up with the new tendering process, which forced employees to buy cartridges only from contracted suppliers – which in this case were Staples and Office Max.