Contract value leakage is the difference between the value a contract was negotiated to deliver and the value the company actually captures over the contract's life. Research from World Commerce & Contracting and Deloitte puts the average leakage at 19% of contract value.
Where the leakage happens
Leakage concentrates in a few predictable places: unclaimed rebates, missed volume thresholds, auto-renewals at pre-negotiation rates, price protection not invoked, and MDF programs not drawn. Each is small in isolation and compounds across a large portfolio.
How to close it
Closing the leakage gap requires continuous matching of contract terms against ERP transactions, alerting on threshold proximity and claim windows, and structured entitlement management. This is the discipline of Contract Performance Management.
