Formal Benchmarking in Outsourcing Contracts: TPI's Position

TPI clients have consistently stated that they must be able to measure the difference between contract pricing and prevailing market pricing. This requirement is especially crucial in longer-term contracts. As both clients and service providers have concluded, however, relying on a formal benchmarking clause to meet pricing variances is not always proving to be effective in today's outsourcing industry. This paper discusses how to use formal contract benchmarking to help address variances; it explains how parties can use benchmarking as a more effective tool in sourcing relationships.