Client
Large mining company with operations in Australia
Industry
Mining
Project Timeframe
December 2021 to November 2023
Revenew Services
Contract Compliance—focusing on the procurement of MRO materials, supplies, and equipment.
Project Scope
Revenew conducted a contract compliance review to ensure adherence to contractual terms by the client’s supplier. This review aimed to identify potential billing disputes, assess billing accuracy, validate the substantiation of charges, uncover cost recovery opportunities, and recommend enhancements to the client’s contract management process.
Revenew’s contract compliance team analyzed the client’s agreements with the MRO materials supplier for their Australia operations. The scope of the review encompassed two primary contracts representing an approximate total expenditure of AUD $20-21M.
Revenew’s Approach
Revenew conducted a contract compliance audit to verify the supplier’s adherence to contractual obligations with our client. This audit included a detailed analysis of billing methodologies and contract terms to pinpoint inconsistencies and potential overpayments in areas such as e-catalog pricing and purchase order overrides. Revenew focused on substantiating the client’s claims based on the established contractual language.
Key Outcomes
- The audit identified AUD $362,836 in potential recoveries and achieved actual recoveries of AUD $259,020.
- This included recoveries related to excessive markups on third-party transactions (AUD $129,505), purchase order overrides (AUD $29,515), volume rebates (AUD $100,000), and unapplied credits (AUD $10,760).
Beyond the immediate financial recovery, the project fostered discussions that culminated in an agreed-upon contract variation. This modification resolves e-catalog pricing issues by eliminating the markup structure and implementing an uncapped rebate calculation. The intended outcomes are strengthening the relationship and enhancing the contractual framework for future engagements.