Agreement Benchmarking

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The repository is generally designated as part of a tripartite agreement with the supplier and the customer, which defines the respective rights and obligations of the parties. Suppliers will want to ensure that the tripartite agreement contains robust confidentiality conditions, which limits the use of vendor price information disclosed during the referral process. The repository will generally try to retain the right to include data collected by the supplier on an anonymous basis in its contract database: in general, all contracts have several key clauses. When it comes to telecommunications contracts, including long-term contracts (more than 2 years) or contracts… Dare to say that with clumsy spending obligations, an important clause of the contract that you must include is the right to compare your costs. Lay people are a reference clause that you can protect, that your contract rate remains competitive throughout the contractual relationship. Therefore (and given the delays and burdens often associated with the negotiation and agreement of the terms of reference), clients should carefully consider, at the beginning of contract negotiations, whether formal reference fees are required given the length of the contract. Customers will generally have supplier fees tested on the market as part of the initial tendering process and, for many customers, formal calibration of contracts with an initial term of three or four years is considered «nice» and not a «must». In the case of a contract with a longer start time, most customers will generally try to compare supplier costs at regular intervals over the life.

The overall goal of performance calibration is to make changes and improve performance. Once a database line is established, the organization must regularly check performance and compare it with these established repositories, and it can use these benchmarks to find potential improvements and define contract management KPIs. We especially like what the LB3 team has had to say about performance calibration, actually make sure that your reference clause has a few teeth. (Click here to read.) Topics: Contract Management KPI Contract Management king contract Management Benchmarking The benchmark is generally agreed. In some respects, it makes more sense to name the repository at the time of calibration, as this will allow the parties to choose the repository with the most current and accurate data. However, it is understandable that customers are concerned that this approach is delaying the referral process and could be used by the supplier as a delaying tactic. To allay these concerns, the parties to the contract generally agree on a pre-approved list of acceptable repositories from which the client can choose at the time of the reference exercise. The supplier obviously prefers that each reference report be indicative and used (if any) to conduct discussions or negotiations on pricing, as any price adjustments are subject to agreement.

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