PROCUREMENT SAVINGS REALIZATION BRIDGE: ILLUSTRATIVE DEFAULT RECORD
OBSERVED PERIODS
Baseline purchase volume: 250,000
Baseline unit price: $100.00
Current purchase volume: 300,000
Negotiated unit price: $92.00
Contract compliance: 80.0%
Actual compliant unit price: $94.00
Off-contract unit price: $99.00
Baseline spend: $25,000,000
Current spend: $28,500,000
Current blended unit price: $95.00
Negotiated savings on current volume: $2,400,000
Realized price savings: $1,500,000
Savings leakage: $900,000
Savings realization: 62.5%
OBSERVED SPEND BRIDGE
Purchase volume: +$5,000,000
Negotiated price: −$2,400,000
Contract price execution: +$480,000
Off-contract purchasing: +$420,000
Spend movement: +$3,500,000
FORWARD SAVINGS-REALIZATION ASSUMPTIONS
Period B length: 12 months
End-of-horizon volume growth: 12.0%
Target contract compliance: 95.0%
Compliance action starts: M2
Compliance fully realized by: M5
Contract-price recovery: 100.0%
Price-execution action starts: M2
Price execution fully realized by: M4
Off-contract premium recovery: 50.0%
Off-contract action starts: M3
Off-contract recovery fully realized by: M6
One-time implementation cost: $350,000
Forward horizon: 12 months
FORWARD SAVINGS-REALIZATION RESULT
End no-action blended unit price: $95.00
End managed blended unit price: $92.18
Cumulative gross spend avoided: $739,466
End monthly savings: $79,100
One-time implementation cost: $350,000
Net procurement benefit: +$389,466
Payback month: M7
OPERATING THRESHOLDS
Minimum proportional realization of the entered compliance and price-recovery plan: 45.9%
Latest common plan start preserving non-negative in-horizon value: M7
Maximum one-time implementation cost preserving non-negative in-horizon value: $739,466
METHOD STATUS
Management-entered assumptions. The observed bridge separates purchase-spend movement into volume, negotiated price, contract-price execution, and off-contract purchasing. The forward analysis begins from current compliance, compliant price, off-contract price, negotiated price, and monthly purchase volume. Purchase volume grows linearly to the entered end-of-horizon rate in both cases. The no-action case holds current compliance and paid prices constant. In the managed case, contract compliance moves linearly to the entered target, the compliant-price gap to negotiated price closes by the entered recovery share, and the off-contract price gap to negotiated price closes by its entered recovery share. Each mechanism follows its own start and full-realization timing. Gross spend avoided equals no-action spend less managed spend. The one-time implementation cost is charged when the first entered action begins. No external procurement savings, compliance, price-recovery, or implementation-cost benchmark is used.
