Contract Renewal Review Template for E-commerce & Retail
A structured procedure for reviewing expiring contracts, assessing performance and value, and making informed renewal, renegotiation, or termination decisions.
Purpose
To ensure that all material contracts are reviewed before expiry so that the organisation makes informed decisions about renewal, renegotiation, or termination based on performance, value for money, and alignment with business needs.
Scope
Covers all material contracts including supplier agreements, service contracts, lease agreements, software subscriptions, and maintenance contracts. Applies to contracts approaching their renewal or expiry date.
Prerequisites
- Contract register listing all contracts with expiry dates, renewal terms, and notice periods
- Access to the original contract documents and any variations
- Performance data and feedback from stakeholders who manage the contract relationship
- Budget information for the relevant cost centre
Includes Australian Consumer Law (ACL) compliance features, GST calculations, and product safety record management.
Step-by-Step Procedure
Identify Contracts Approaching Renewal
Review the contract register to identify all contracts due for renewal or expiry within the next 90 days.
- 1.1Run a report from the contract register filtering for contracts expiring in the next 90 days
- 1.2Note the notice period required for each contract if the organisation wishes to terminate or not renew
- 1.3Assign a responsible person for each contract review
- 1.4Confirm the review timeline allows for the required notice period
Review Contract Performance
Assess the supplier or service provider performance against the contract terms, KPIs, and stakeholder expectations.
- 2.1Gather performance data against any KPIs or service levels specified in the contract
- 2.2Collect feedback from internal stakeholders who interact with the supplier
- 2.3Review the return request or issue log for any recurring problems
- 2.4Document the overall performance assessment as satisfactory, needs improvement, or unsatisfactory
Assess Value for Money
Evaluate whether the contract continues to represent value for money by comparing current pricing to market rates and assessing total cost of ownership.
- 3.1Review the current contract pricing against the original terms
- 3.2Research current market rates for comparable goods or services
- 3.3Calculate the total cost of ownership including any ancillary costs
- 3.4Identify any price escalation clauses and their impact on future costs
Determine the Recommendation
Based on the performance and value-for-money assessments, prepare a recommendation to renew as-is, renegotiate terms, go to market, or terminate.
- 4.1Evaluate the renewal options: renew, renegotiate, tender, or terminate
- 4.2Consider switching costs, transition risks, and business continuity impacts
- 4.3Prepare a written recommendation with supporting rationale
- 4.4Identify any contract terms that should be improved if renegotiating
Obtain Approval
Present the renewal recommendation to the appropriate authority for decision, ensuring the value and risks are clearly communicated.
- 5.1Submit the recommendation to the relevant budget holder or executive for approval
- 5.2Present the performance assessment, value analysis, and options
- 5.3Obtain written approval for the recommended course of action
- 5.4Record the decision and approval in the contract management system
Execute the Decision
Action the approved decision by renewing, renegotiating, issuing notice, or commencing a tender process as applicable.
- 6.1If renewing: sign the renewal and update the contract register
- 6.2If renegotiating: engage the supplier and document agreed changes via a variation
- 6.3If terminating: issue formal notice within the required notice period
- 6.4If tendering: initiate the procurement process with updated specifications
Update Records
Update the contract register with the outcome and file all documentation for future reference.
- 7.1Update the contract register with the new expiry date, terms, and pricing
- 7.2File the renewed or varied contract in the document management system
- 7.3Set a reminder for the next review 90 days before the new expiry date
- 7.4Update the budget for any pricing changes resulting from the renewal or renegotiation
Quality Checkpoints
Common Mistakes to Avoid
Expected Outcomes
All material contracts are reviewed at least 90 days before expiry with a documented recommendation.
Contract renewals and renegotiations deliver measurable cost savings or improved terms compared to the prior contract period.
Frequently Asked Questions
Who is authorised to sign a contract renewal?
Contract signing authority is determined by the delegation of authority matrix based on the contract value and type. Ensure the signatory has the appropriate delegated authority before execution.
Can I renegotiate terms without going to market?
Yes, direct renegotiation is appropriate where the supplier is performing well and the terms remain competitive. However, obtaining market comparisons strengthens the negotiation position.
What if a contract has automatic renewal provisions?
If a contract automatically renews, the required notice period for non-renewal must be met. Track these dates carefully in the contract register and set reminders well in advance of the notice deadline.
What should the contract register include?
The register should include the contract title, parties, commencement date, expiry date, renewal terms, notice period, annual value, contract manager, and a link to the signed document.
What is the threshold for a material contract requiring formal review?
Material contracts are those above a defined annual value threshold (e.g., $10,000 per annum) or contracts that are critical to business operations regardless of value. Check the procurement policy for the specific threshold.
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