Ensuring Contract Compliance

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Office Depot’s strong executive level support and oversight

• Strong executive level support and oversight of Contract Compliance

– Board of director updates• Quarterly updates• Audit committee reviews

– Executive steering committee• Chaired by Office Depot’s Business Solutions Division

President• Oversight of major milestones• Monthly updates on project status and key deliverables

– Internal audit oversight and review• Monthly meeting to review potential risks• Quarterly reviews of SOX requirements• Periodic internal audits

Confidential 33

Office Depot has enhanced its contract compliance capabilities through investments in both organizational structure and systems

• Support of our sales team in writing clear and concise contract language

• Analyze potential risks with contract requirements, terms & conditions, or special provisions

• Validate pricing set-ups and changes

• Maintain integrity between our pricing systems and written contracts

• Ensure all documents are gathered and loaded into Aprimo

• Define and monitor key contract triggers and perform periodic contract and pricing set-up reviews

• Centralized document repository and contract database

• Contract event triggers to alert sales reps and compliance managers of upcoming requirements (pricing updates, renewals etc.)

• Built in workflow to support processes and ensure all required activities are completed on time and according to contract terms

• Contract update planning and reporting

• One end to end pricing solution to manage the bid and pricing processes

• Built in workflow to drive faster more accurate responses

• More effective price administration, price setting policy, and rebate management

• Automated price updates for catalog transition and cost changes

• Better access to sales history for price reconstruction and customer reviews

• Institutionalized common processes and best practice utilization

Contract ComplianceOrganizational Support

Document ManagementSolution (Aprimo)

Price List ManagementSystem (Vendavo)

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To ensure independence, Office Depot’s Contract Compliance and Pricing teams report into the Finance organization

Field Contract Compliance16 Compliance Associates15 Credit Liaisons

Contract Management and Administration8 Contract Associates

Pricing & Customer Maintenance46 Pricing Associates

BSDFinance

• Manage and maintain contract document storage system and ensure document capture.

• Define and monitor key contract triggers.

• Perform periodic pro-active contract and pricing reviews.

• Search for process improvement and push change .

• Review bid solicitations and analyze contract requirements, special provisions, and T&Cs to ensure compliance with appropriate laws, regulations, and policies.

• Manage communication with legal, finance, pricing, etc. for resolution of contract issues.

• The Contract Bids team is responsible for working with sales reps to respond to customer bids and RFPs.

• The customer maintenance team is responsible for account analytics and account maintenance for existing business.

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Ensuring pricing accuracy through structure, process and oversight

• How is Office Depot’s Business Solutions Division ensuring pricing accuracy?

– Enhanced processes that includes multiple individuals accountable for price approval and validation

– Strict adherence to contract terms and conditions

• Contract Compliance organization reviews and approves all price change requests

Define Pricing

Submit Pricing

Validate Pricing

Manage Pricing

1 3 42

Pricing Updates

Contract Compliance Support

Confidential 66

Ensuring pricing accuracy through structure, process and oversight

• How is Office Depot’s Business Solutions Division ensuring pricing accuracy?

– Automated daily pricing set-up reviews are performed on large account base

• Ensures correct and consistent pricing for large customers with multiple child accounts

• Review runs overnight and generates exception reporting that is routed to the compliance manager, account rep, and account maintenance team for corrective action