How often should benchmarking be allowed?

Typically once a year or every two years; too frequent and it becomes disruptive, too rare and the contract drifts off market.

Who pays for the benchmarking exercise?

Usually the customer commissions it, but a common compromise is to split costs or shift them to the supplier if a large gap is found.

What qualifies as a like-for-like comparison?

The comparison must account for the same service scope, volumes, SLA levels, and support model. A benchmark that ignores customisation or scale will produce a misleading result.

What happens if the supplier disputes the benchmarker's findings?

The clause should set an escalation path: discussion within a set period, then referral to an independent expert whose decision is final and binding.

Can the supplier refuse to adjust prices after a benchmark?

Only if the clause gives discretion rather than a binding obligation. Customers should insist on automatic adjustment or, at minimum, a clear termination right if the supplier refuses.

Benchmarking Clause

Lets a customer periodically test contract pricing or service levels against the wider market.

What it is

A benchmarking clause gives the customer a right to have an independent expert compare the supplier's prices and service levels against a representative market sample. If the contract is materially out of line, the parties adjust the terms.

Why it matters

In long outsourcing or managed-service deals, prices set at signing can drift far above market over several years. Benchmarking keeps a long contract competitive without forcing the customer to re-tender.

How to apply it

Define the comparison sample, the metrics benchmarked, and how often it may be run.
Appoint a neutral benchmarker and agree who bears the cost of the exercise.
Set a materiality threshold that triggers a price or service adjustment.
State the consequence: automatic adjustment, renegotiation, or a termination right.

Negotiation tips

• Suppliers should require a like-for-like comparison reflecting volume and service scope.
• Customers should secure a binding adjustment rather than a mere obligation to discuss.

Common pitfalls

• A vague comparison basis that lets the supplier dismiss any unfavourable result.
• No consequence attached to the benchmark, making the clause toothless.

Legal references

BW 6:248 Reasonableness and fairness Dutch law

Unless marked otherwise, references are to Dutch law (Burgerlijk Wetboek, the Dutch Civil Code); EU instruments such as the GDPR apply across the EU. This is general information, not legal advice. Other jurisdictions treat these concepts differently. Verify the current text and your situation with a qualified lawyer.

Frequently asked questions

Common questions about this clause.