We'd be interested to know about something that has been told to us with regard to our company possibly getting a US rightsholder to market our catalogue in the USA.

Apparently, according our informer, most schools in the United States have a "sole source" rule, which only allows purchases to be made from suppliers where it's clear that the school could not get the same product elsewhere for a lower cost.

If true, this might impact the position of the US-based company that we chose to partner with as theoretically, the school might be able to purchase direct from the UK, possibly at a slightly lower price.

Is this true, or perhaps I misunderstood?

I used to be a purchasing agent for a firm that did a great deal of business with government entities.

Government contracts (for schools, towns, counties, sanitation departments, etc.) "require" competitive bidding, and purchasing departments must show that a minimum of (usually) three bids have been obtained for anything over a specific dollar value.

The sole source rule doesn't "require" you to buy from any particular source. It exists to "allow" you to only get one bid if you only have one source for that product. In other words, if the "only" place you could get the product was in the U.K., then you could be exempt from the "three sources" requirement. If, on the other hand, you didn't want to deal with the U.K., you could get three quotes from domestic sources (all of whom themselves would be buying from the U.K.) and you could choose one of those three as your preferred source - the only difference in pricing being how much of a mark-up they put on the original product.

From the way you're describing things, it might be more of a hardship for a school district to buy things from the U.K. than from a domestic source - first because they'd be having to deal in pounds versus dollars, and second because most U.S. government contracts require U.S. suppliers. In other words, you might be at a distinct advantage: being the domestic source for a foreign product makes you the vendor of choice.

I'd have to know more precise information, and I think you should be able to talk with some sample contract administrators on this side of the Atlantic for their take on the situation, but I think you actually might be in a pretty good position.

Edited by edh915 - 8/17/12 at 6:25pm