Building a Self-Funding Contract Compliance Program

Negotiating supplier contracts is a significant investment of time and resources, making it essential to periodically assess their effectiveness through a contract compliance program. These audits rigorously review vendor contracts to identify value leakage, recover lost profits, and prevent future errors.

Many procurement departments struggle with the budget and expertise needed for effective contract compliance, leading to ongoing losses. This challenge can be addressed by partnering with experts to create a self-funding audit program. Such a program captures historical recoveries, uncovers systemic issues, and ensures compliance throughout the contract duration.

The real value of a robust audit lies in its preventive capabilities, addressing root causes of leakage and maximizing future savings. The paper also discusses a self-funding model for audits, which blends contingency and hourly fees, ensuring that recoveries can finance ongoing audit efforts.
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