Supplier price review unresolved at renewal?
Agree a written interim arrangement before releasing renewal orders. Define the temporary price, expiry, authorised orders and whether the eventual settlement can adjust those orders retrospectively. Record the calculation and approval process for any adjustment. Cambridge China Bridge can help coordinate the supplier discussion.
Separate the renewal from the unresolved price
Collect the current agreement, price schedule, review correspondence and outstanding order confirmations. Identify what each party proposes to continue and what remains disputed. Ask your contract adviser to check renewal, notice and variation wording before approving the interim document; do not assume the old price continues or the proposed increase is accepted.
List the unresolved items, such as material costs, currency basis or volume assumptions, and the evidence needed to settle them. Use the annual pricing comparison guide for evaluating offers. This arrangement should address the gap while negotiations continue.
Put the temporary arrangement in writing
Ask the buyer and contracting supplier to approve the same dated document. Name the contracting parties, covered products, specification revisions, temporary price, currency, payment terms, delivery basis and start and expiry dates. State whether the interim price is final for covered orders or provisional pending an agreed adjustment.
Identify which existing terms continue and how conflicting order acknowledgements will be handled. Set a review deadline, named decision owners and an escalation route. Agree what happens at expiry: a written extension, a final settlement or a pause in new releases. Define separately how already authorised work will be completed.
Authorise only the orders you need
Attach a schedule of permitted orders, products, quantities, delivery dates and spending limits. Name who may release them and who must approve changes. Distinguish forecasts and capacity discussions from production authority. Require fresh written approval for additional orders, material purchases or commitments outside that schedule.
Ask the supplier to acknowledge each release against the interim arrangement before starting the authorised work. Record the applicable price status on the order so accounts staff can match invoices correctly. The production purchase order guide covers the wider order details.
Decide whether settlement reaches earlier orders
Choose expressly between a final interim price with later prices applying only to future orders, and a provisional price with defined retrospective adjustment. For future pricing, name the trigger, such as orders accepted after the agreed effective date. For retrospective pricing, identify the covered orders and whether delivered, invoiced or paid goods are included.
Agree the calculation basis, supporting evidence, treatment of increases and decreases, any adjustment limit and the settlement method. Assign approval responsibility and require an order-level reconciliation before payment or credit. Avoid leaving the supplier to calculate an unspecified catch-up charge. Keep any temporary surcharge separate using the surcharge expiry guide.
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Close the review and reconcile the records
Record the final agreement, its effective trigger and the orders it replaces or adjusts. Reconcile purchase orders, invoices, credits and payments against the interim schedule. Tell procurement and accounts staff when to stop using the temporary price, and retain the supplier's acknowledgement with the settlement record.
For imports covered by a price review or retrospective adjustment, HMRC guidance says the transaction value must use the total final price payable under the contract. Give your customs agent the interim and final arrangements before shipment where possible, and ask how to handle provisional values and any later reconciliation. If negotiations fail, use the second supplier qualification guide to plan an alternative.
Frequently asked questions
Can we keep ordering while the annual price is disputed?
Agree a written interim arrangement first, then release only the orders it covers. Specify the price status, expiry and approval limits, and obtain the supplier's acknowledgement.
Should we use the old price until the review is settled?
Propose it explicitly rather than assume it continues. Record whether it is final for authorised orders or provisional, and ask your adviser to check it against the existing agreement.
Can the final supplier price be backdated?
Decide this expressly in the interim arrangement. If you accept retrospective adjustment, define the covered orders, effective trigger, calculation, limits and treatment of decreases.
What if the interim arrangement expires before agreement?
Follow the agreed expiry plan: extend it in writing or pause new releases. Confirm separately how authorised work continues, and escalate the unresolved pricing to the named decision owners.