Off-contract spend

In procurement, spend in a category that went to a supplier or at terms the contract did not specify. Also called maverick spend. It clusters by site and requester, which is where the finding is.

DefinitionIn procurement, spend in a category that went to a supplier or at terms the contract did not specify. Also called maverick spend. It clusters by site and requester, which is where the finding is.

How it is found

Invoice lines matched against the contract in force on the invoice date, by category, supplier and site. Lines that do not match are off-contract, broken out by site and requester.

Not always a failure

A site outside the contract's coverage, or a category with no contract, is not maverick. Carry the contract's scope and report those lines separately.

How it is computed

Invoices in a contracted category that went to a different supplier or were priced off the agreement, by requester and cost centre.

Example

A packaging contract covers the category. $2.2 million of $9.0 million went elsewhere, and eleven requesters account for 70 percent of it.

Where it goes wrong

Reported as a percentage, which prompts a policy reminder. A list of eleven names prompts eleven conversations.

Articles that use this term

Procurement and supply chain · Procurement

Contracted share against actual spend by category: the procurement roll-up

How a procurement team measures contract compliance from the purchase ledger: spend by supplier against the contracted share per category, off-contract purchases by site and requester, single-source exposure, and the reconciliation to accounts payable.

16 Sept 20263 min read Procurement and supply chain · Procurement

Maverick spend by requester: where off-contract purchasing actually comes from

Why category-level compliance figures hide the real finding, how a procurement team breaks off-contract spend down by site and requester from the purchase ledger, the three patterns that account for most of it, and the conversation each pattern needs.

16 Sept 20263 min read Coverage and territory

The weekly list by industry: what row one says on twelve desks

Every desk's analytics ends in a list, ranked by value, with a reason on each row and an owner. This hub gives, for twelve industries, what the weekly list is, what row one typically says, how it is ranked, who works it, and the guide that builds it, so that a reader can see the shape of the output before they see the arithmetic behind it.

16 Sept 20263 min read Procurement and supply chain · Procurement

KPIs for procurement teams: ten measures that matter, each with its formula and the export it comes from

The ten KPIs a procurement function should run on, each with its formula, the export it comes from and what it tells you: spend under management by invoice, contracted share against actual spend by category, maverick spend by requester, savings realised against savings claimed, suppliers per category and the tail, payment terms compliance, supplier performance against own baseline, contract expiry coverage, price variance on like items, and supplier concentration. Also the three measures most teams miss, the figures to drop, the identities, and who owns what.

17 Sept 20264 min read