Smart-Purchasing.com: Best Practices: Checklist

Best Practices: Contracting
Pursue Continuous Shared Cost Elimination

Traditional	Best Practice
Obtain lowest available cost at contract negotiation	Obtain lowest available cost at contract negotiations Commit to continuous cost elimination during the life of the contract Collaboration Share saving Quarterly measurement meetings

Rationale
Provides suppliers with continued incentive to reduce their prices throughout the life of the contract
Details
Contract language for continuous cost elimination on all multi-year contracts and on annual contracts greater than $100,000 Performance reporting system

Best Practice | Case Study | Commentary