Turning off-contract purchases into negotiated terms
Every item bought outside the price schedule is a price that has not been negotiated. Taken together, these items are an argument for your next negotiation.
A common blind spot
A framework agreement covers a list of items. In practice, teams also buy articles that are not on it, and these purchases are billed at the supplier's public tariff, with no discount or tier. They are called off-contract, off-schedule or off-catalogue purchases. They often escape controls, for lack of a reference price to compare them with.
Their origins vary. The product did not exist at the time of the negotiation, or had not been anticipated. An urgent need led to ordering what was available rather than what was listed. The supplier delivered an equivalent article, billed at another tariff. Users do not know which items the contract covers. Or an amendment removed an item from the price schedule and it keeps being bought.
What these purchases say about you
Taken in isolation, each purchase looks harmless. Brought together, they show what you actually buy, in what quantities and at what prices. This data proves a recurrent need, and therefore a volume that can be negotiated.
Over one financial year, a supplier bills for example 380 items missing from the price schedule, for €640,000 in total. Ranking by annual amount shows that 20 of them account for 70% of that spend.
| Item | Value |
|---|---|
| Items billed outside the price schedule | 380 |
| Total amount outside the price schedule | €640,000 |
| Items that account for 70% of the amount | 20 |
| Amount concerned | €448,000 |
| Annual saving with an 8% term (assumption) | €35,840 |
The 8% rate is a working assumption: only negotiation tells what term the supplier is prepared to grant. The approach lets you negotiate on twenty items instead of getting lost among three hundred and eighty.
Putting them to use, step by step
- Identify, over the period, the items billed that are not in the price schedule in force on the billing date.
- Rank them by annual amount and by purchase frequency.
- Distinguish recurrent needs from genuinely one-off purchases.
- Add the most significant ones to the price schedule at the next negotiation, with a price and, if possible, a place in the discount tiers.
- Provide a clause for equivalent or new items: a price set in advance, or a calculation rule (a discount on the public tariff).
- Match these volumes against the discount tiers, described in discounts, tiers and year-end rebates, to measure what they would have earned.
To track progress from one year to the next, three indicators are enough: the share of off-contract purchases in the total billed, by supplier; the number of off-schedule items with their concentration; and the compliance rate of the lines billed for the items covered (see the value lost after signature).
Presenting them to the supplier
The supplier knows its sales, but rarely their breakdown from the buyer's point of view. A well-presented analysis changes the conversation: you no longer discuss impressions but items, volumes and amounts. You start from the facts (list of items, annual quantities, prices paid, billing dates), show the recurrence (an item bought every month for two years is no longer a one-off purchase), propose a framework (addition to the price schedule, target price, place in the tiers) and tie it to the duration, since a volume commitment is the natural counterpart of a better price.
The same logic applies to the discrepancies found at each supplier: they are put forward at the renegotiation, with their evidence. This analysis is part of the reporting described in our method.
Frequently asked questions
Is an off-contract purchase necessarily an anomaly?
No. A one-off need or a new item can legitimately be bought outside the price schedule. The issue is not the purchase itself but the absence of negotiated terms once it becomes recurrent.
Should all these items be added to the price schedule?
No, only the most significant ones. Ranking by annual amount and by purchase frequency lets you concentrate the negotiation on the handful of items that account for most of the spend.
Are off-contract purchases counted in year-end rebates?
It depends on the clause: the base may include or exclude items outside the price schedule. It is a point to check explicitly, because an exclusion that was not intended reduces the rebate without anyone noticing.
