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Contract compliance and leakage

Measure spend that bypasses contracts or pays more than contracted prices.

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Procurement & vendor management

How it's worked out

  • Compliance = contracted spend ÷ addressable. Leakage = off-price spend + overcharges + uncollected rebates
  • Same period and spend cube
NoteLeakage counts spend at non-contracted prices in full; the true loss is the price gap on that spend.

Source: Hackett Group and CIPS procurement benchmarks (contract compliance)

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