At-A-Glance: Contract Compliance Audit of 12 Maintenance Services Suppliers
Mining operations face unique challenges including specialized equipment requirements, remote site logistics, and complex maintenance requirements that increase supplier management complexity. This North American copper mine managed a substantial spend of $20-$50M each across 12 maintenance suppliers. Copper remains in high demand for renewable energy infrastructure, electric vehicles, and electronics manufacturing, putting pressure on mining companies to optimize operations. Stringent environmental regulations, safety mandates, and increasingly difficult-to-access deposits already place significant cost pressures on the industry, making effective contract management even more critical.
$15M+
Corrective Actions Identified
$3.2M
Cash Recoveries Realized
$50M+
Auditable Spend
(Across 12 Suppliers)
Challenge: Addressing Contract Management in Mining Maintenance
The mining operation faced escalating challenges in overseeing their maintenance contract portfolio. The pricing structures included time-and-materials contracts with cost-plus elements, creating potential misunderstandings between suppliers and the payor. With multiple suppliers operating under different terms, the company needed comprehensive contract visibility to identify billing discrepancies and prevent ongoing financial leakage across their critical maintenance services.
Solution: Extracting Maximum Value Through Strategic Contract Management
PRGX reviewed complex contract data from multiple sources to discover anomalies, validate invoice accuracy, and increase operational efficiencies for the mining company.
The PRGX Contract Management Services team identified miscalculations, application errors, and excessive markups that resulted in $3.2M in immediate cash recoveries while also identifying opportunities for over $15M in future savings. PRGX’s industry-leading methodology and technology also fosters healthier supplier relationships, which is especially important when dealing with complex supply chains.
Breakdowns Identified
- Miscalculated labor rates (cost plus rates)
- Application errors (overtime/standby/PTO)
- Direct service providers excessive markups
- Unauthorized living out allowance
- Equipment billing errors; quantity and price
- Excessive materials markups
Key Learnings
- Related party transactions
- Weak equipment billing field controls
- Equipment billing over replacement cost
Ready to achieve 6x ROI with PRGX Contract Management Services?
Powered by our innovative Contract Insights™ AI platform, the PRGX Contract Management Services team helps you ensure Contract Compliance, maximize value through Contract Optimization, and proactively manage risks through Contract Monitoring. We apply over five decades of experience across industries to drive savings and recovery with smarter contracts. Our unique blend of personalized expertise and secure AI technology creates supplier contracts that actively contribute to your bottom line. Chat with our team of experts about your unique goals or watch a demo to see our solutions in action.
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