Long term contracts are an excellent means to building a supplier relationship that at its best implementation addresses continuous improvement through the term. Examples include
raw materials and components supply to manufacturers and MRO contracts in both the private and public sectors. These types of contracts are distinct from project based or one-off type procurements. So how to address the process when the day comes to retender long term contracts for similar goods and services? In my opinion that process begins before signing the original contract. The RFx and resulting contract should address contract management issues such as data reporting, and clarity regarding future process as the end of contract term approaches. The data collected will provide transparency when disclosed in future tenders. Only proprietary methods of work could be considered confidential to the incumbent supplier. Disclosed information as appropriate to the tender could include:
The end of contract process should not be a surprise to the incumbent contractor/supplier. Transparency about the beginning, during and end of contract processes when tendering long term contracts will attract competitive offers including from the incumbent supplier. |