Contract that says vendor must be price-competitive may give hospital an out.

A hospital has a long-term contract with a supplier for all of the hospital's requirements of certain items at set prices. The contract has three years yet to run. The contract has a clause saying that the supplier will remain price competitive. The hospital's materials manager learns that, by joining a group purchasing association for all of a large number of items, the items covered by the long-term contract can be purchased at better prices. The supplier refuses to release the hospital from the long-term contract. In this dialogue, Dr. Decker discusses the legal issues raised by this situation and makes some suggestions for dealing with the problem.