‘Why does that have to be from a designer brand?’ The story behind the cost of furniture at the EUR

“The furniture in this room weren’t that expensive though,” someone jokes as we walk into a completely empty back room at the University Council office. Hans van den Berg, chair of the University Council, grins. Several (former) council members are dissatisfied with the cost of furniture on campus, even here in their own offices. “When I heard about the bill for the furniture, I was a bit flabbergasted. Surely, we can do better,” says council member Florian Wijker. On my way out, I noticed the coat hangers on the coat rack, which appear to be from the Danish designer brand HAY. “Another thing,” says Wijker. “Why on earth should that have to be from a designer brand too?”

Does the EUR really pay too much for furniture? How does the EUR select which brands to buy from? EM looked into it.

Employees can order two types of furniture at the university, ‘standard’ and ‘other.’ The standard furniture has a friendlier price that is in line with the market. The other furniture comprises pricier products from more luxurious brands, as evidenced by a quote and reactions from supplier Ahrend and the EUR. Since certain products do not have a standard version and Ahrend is the only supplier, employees sometimes have no alternative but to order the fancier ‘other’ furniture. In this respect, it is not always obvious to the employee on what basis the choice for a specific product was made.

When an office is furnished on campus, the EUR cannot just drop by IKEA. European legislation stipulates that public institutions such as universities are required to make any purchases that exceed a certain amount via a European tender. This type of tender is a kind of competition: the winner – the company that best meets the requirements – is awarded the contract, and no one else. Furniture giant Ahrend is this winner at the EUR and therefore has the exclusive right to supply furniture. According to the university they opted for this in the tender process, otherwise each order would become much more complicated with multiple, competing suppliers. “This would entail extra organisational costs and additional expenses for multiple market players, which would limit the EUR in the current approach,” said a spokesperson for the EUR. If a room on campus needs new furniture, an employee of the relevant department must order it from Ahrend. Then how is it possible that clothes hangers from HAY (which is not part of Ahrend) are hanging on the coat rack?

Much of the furniture on campus is made by Ahrend itself. This is referred to as ‘standard furniture.’ It is commonly used practical furniture, such as desks and cabinets. However, not all the furniture comes from Ahrend’s own collection. Accessories such as rugs, side tables and also the aforementioned coat hangers belong to the second category: ‘other furniture.’ These products are not made by Ahrend itself, instead they are procured from external brands (including HAY). The EUR specified which brands these should be in the 2018 tender. Ahrend supplies them to the university at a discounted rate.

What price does the EUR pay? As far as standard furniture is concerned, this question is easy to answer. On the university’s intranet, employees can view the complete price list of the furniture. These prices are very similar to those of other universities and to consumer brands. Certain products are even supplied more cheaply by Ahrend than by, for example, IKEA.

It turns out to be more difficult to establish how much ‘other furniture’ costs. A price overview like that of the ‘standard furniture’ is non-existent. A comprehensive price comparison with consumer brands or other universities is, therefore, out of the question. Employees of the EUR can only find out the price listing of this ‘other furniture’ by requesting a quote from Ahrend. Nevertheless, a clear picture does emerge from such a quote, which a council member shared with EM.

The council had selected suitable products from the IKEA catalogue and enquired whether Ahrend could make an offer for similar products from their external brands. E.g.: for a rug, the EUR pays €392, a similar rug from IKEA costs €179. For one pillow, the EUR pays €62, whereas a similar pillow from IKEA costs €10. For HAY brand clothes hangers, the university pays €5.70 each (comparable Hema luxury hangers cost consumers €1.66 a piece). Therefore, prices in the ‘other’ range appear to be a lot higher than those of consumer brands.

According to a university spokesman, the price discrepancy is ‘not surprising.’ “If employees are keen to have furniture that offers more than the standard range, for instance, because of aesthetics or design, then Ahrend offers this through their purchase of external brands. Because these products invariably have more to offer than standard furniture, it is not surprising that the prices are higher. I would like to emphasise that staff always have the option of choosing from the standard range whose prices are comparable to IKEA.”  Staff do not have a choice when it comes to the standard range -for example, for pillows -but only from the ‘other’ range on offer. “What is or isn’t in the standard product range is defined on the basis of the input provided for the tender by the EUR staff,” the spokesperson tells us.

From the overview of standard products, it appears that a lot of products do not have a standard variant at all. The standard furniture consists of a limited number of essential furniture, such as desks and cabinets. According to a staff member, clothes hangers or cushions, for example, can only be ordered from an external brand that Ahrend supplies.

Which external brands does the EUR buy through Ahrend then? The university states that the contract managers at the EUR know which brands these are, but that this information is ‘confidential and commercially sensitive’ and will, therefore, not be made public.

Employees who order products via Ahrend also do not know which brands are implicated. A council member states: “If the quote includes a €62 pillow from a design brand, as an orderer, you do not know why the choice fell on that particular pillow. Was it the cheapest? Was it perhaps the only option? After all, you have no insight into what the options are or from which brands”. Ahrend states that it will contact the orderer if there are several options, but this has not as yet happened in the case of the University Council.

Consequently, the list of brands is known to the contract managers at the EUR and to Ahrend, but not to the EUR staff member placing an order. A spokesperson at the university says: “We can imagine that this has caused some confusion. Requests for quotes for furniture from the ‘other’ range are normally always discussed in detail by Ahrend with the enquirer at the EUR before a quote is drawn up for it,” stresses the spokesperson for Erasmus University. “In addition, employees can always contact the Real Estate & Facilities department if they have any questions concerning orders or if they have any requirements other than those covered by the current range on offer. If an employee wants to know more about the choice for a product or range, then you can just ask the contract managers,” the spokesperson of the Erasmus University asserts.

University Council members say that they are unaware that they have the option of making further enquiries to contract managers; also, this option is not mentioned in the ‘Ordering Office Furniture’ guide for employees that can be found on the intranet.

“I find it astonishing,” says Hans van den Berg. “There have been more tenders at the EUR that have raised questions. When you hear what was unclear in the University Council’s procurement process, this raises the question as to how this is done on a university-wide basis.” The chair of the board wants to discuss this with the council after the corona crisis; she will then decide if a further clarification from the Executive Board is called for.