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Procurement professionals support payment by results

6 September 2013

The majority of procurement professionals are in favour of using payment by results (PBR) in the management of contracts. 

This is according to a new survey carried out by Supply Management, which found 68 per cent of respondents back this approach. 

Dan Ware, a procurement business partner at the National Trust, voted in favour of PBR but said such as deal should only ever be reached by "agreement" rather than "imposition". 

He told the news provider this will ensure both parties have the right incentives and will allow for results to be measured accurately. 

However, Richard Gane, supply chain specialist at Vendigital, does not support PBR as he believes it leads to conflicting interests between the supplier and the buyer.

"The customer tries to minimise the price and the supplier tries to preserve the value of the contract and/or maximise profit," he stated.

Martin Blake, head of corporate procurement at the London Probation Trust, backed PBR but warned "excessive" clawback and reconciliation clauses could damage the advantages of such contracts.

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Categories: Commercial, Procurement & Supply Chain

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