On Thursday, Nov. 7, 2013, the Collision Industry Conference (CIC) will be holding an extended discussion during the SEMA Show to address the growing industry concern surrounding insurer-mandated parts procurement programs. The Society of Collision Repair Specialists (SCRS) encourages collision repairers from across the country to be present and participate in this discussion.
"SCRS has been involved with other repair groups in organizing and hosting meetings such as the Repairer Roundtable at different industry-centric meetings throughout the year in an effort to focus repairer discussions on topics that are of most impact to collision repairers," said SCRS Chairman Ron Reichen. "The Repairer Roundtables were specifically held so that repairers could engage in meaningful dialogue surrounding an agenda that reflected the repair industry’s priorities. At this particular CIC meeting in Las Vegas, our group feels strongly that there are few other more important topics than mandates regarding procurement of parts or any other items purchased for resale in our facilities. Because this industry issue is slated to be the primary focus of nearly the entire second day of CIC, SCRS feels the industry is best served by encouraging as many repairers as possible to be present for those discussions."
According to SCRS, the Repairer Roundtable meetings will be continued at other times during the upcoming year, and will continue to be hosted by a variety of organizations as they have in the past.
The discussion comes at a time where a variety of different parts procurement service providers are entering the marketplace at an increasing pace, and while more and more carriers are researching, testing or launching their own programs with the hopes to be further involved in the parts location, selection and ordering process.
Further, SCRS says that industry participants involved in some of these programs are beginning to see changes in current program requirements that seemingly indicate insurers are looking to expand their interests from parts to other purchasing areas of collision business, such as refinish materials and supplies.
A Dec. 15, 2008 version of the State Farm Select Service Agreement, Section 4. Competitive Price, sub-section e. reads as follows:
e. Part Pricing Agreements. Provider acknowledges State Farm may enter into agreements with manufacturers, distributors or suppliers of automotive parts. State Farm will send Provider a notice in writing of any such agreement. Provider may, at its option, participate with State Farm and such entities in obtaining parts for repairs when performing under this agreement. Provider further agrees that any part pricing agreements negotiated by State Farm are in addition to the price offered by the Provider to State Farm under 4.b, 4.c and 4.d. State Farm shall receive the benefit of both the Provider’s pricing offer under 4.b, 4.c and 4.d and the price or discount negotiated through any part pricing agreements. If Provider chooses not to participate with State Farm and such entities, the prices charged for replacement parts may not exceed the prices set forth in this Agreement.
In a revised version of the agreement dated as early as Jan. 17, 2013, Section 4. Competitive Price, sub-section e. includes the following edits:
e. Part Pricing Agreements. Provider acknowledges State Farm may enter into agreements with manufacturers, distributors or suppliers of automotive parts, supplies or materials. State Farm will send Provider a notice in writing give Provider notice of any such agreement. Provider may, at its option, participate with State Farm and such entities in obtaining parts, supplies or materials for repairs when performing under this agreement. Provider further agrees that any part pricing agreements negotiated by State Farm are in addition to the price offered by the Provider to State Farm under 4.b, 4.c and 4.d. State Farm shall receive the benefit of both the Provider’s pricing offer under 4.b, 4.c and 4.d and the price or discount negotiated through any part pricing agreements. If Provider chooses not to participate with State Farm and such entities, the prices charged for replacement parts may not exceed the prices set forth in this Agreement by Provider and may not exceed the price State Farm would have paid, had the Provider participated.
"If parts, paint and materials are of any significance to your business, this is a discussion you don’t want to sit on the sidelines for," said SCRS Executive Director Aaron Schulenburg. "This is your opportunity to learn, ask questions of those with firsthand experience and to let your voice be heard. Don’t allow our industry to be defined by a silent majority."
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