cost savings-avoidance instructions 4-10-07.pdf

The document outlines guidelines for achieving cost savings and cost avoidance in procurement processes. It distinguishes between cost savings and cost avoidance methods and provides detailed definitions and calculations for each. Cost savings methods include savings from competitive processes, rebidding of contracts, and competitive bidding against state or agency contracts. Cost avoidance methods involve cooperative purchasing agreements and audit recoveries. Additionally, the document highlights other areas for potential cost savings or avoidance, such as outsourcing services, value analysis, challenging specifications, and product substitutions. Each method is defined with specific calculations to determine the amount of savings or avoidance achieved.