How we stopped supplier overcharging and saved €585,000… in 2 hours.

Many companies unknowingly suffer from supplier overcharging, especially in long-term IT and telecom contracts.

One of our clients recently asked us to review a supplier proposal that seemed reasonable at first glance. The supplier was offering to take on a new activity and proposed adding it to the existing contract at a rate of €15,000 per month.

It highlighted just how easy it is to lose money when contracts aren’t actively managed.

It was already in the contract:

This case shows how IT contract overcharge prevention starts with visibility. When teams lose track of what’s in the contract, even well-intentioned proposals can result in duplicated costs.

As we went through the proposal, something felt familiar. The service being offered looked nearly identical to something we had seen before.

Sure enough, when we returned to the original contract (signed less than two years earlier) we found a very similar activity clearly listed in the scope of services. It wasn’t new. It wasn’t optional. 

But it had never been delivered altough it had been part of the supplier’s obligations from the start..

No bad intentions: just lack of visibility:

To be fair, we don’t believe the supplier was trying to cheat the client. This type of governance gap is what Deloitte and Gatekeeper highlight: “organizations lacking consolidated contract visibility often overpay due to duplicate services, inconsistent billing, or unmanaged supplier proposals”.

According to a Deloitte‑cited research summarised by Gatekeeper, poor contract governance can allow financial leakage to grow unnoticed.

In this case:

• the supplier’s current team likely wasn’t aware that the activity had already been agreed

• the customer never flagged its absence, assuming it was new

• and no one had been comparing the services being delivered to what was actually contracted

This wasn’t about bad faith, it was about drift. And supplier overcharging happens more often than most organisations realise, specially if you don’t have proper post-signature contract management processes built into your organisation.

How we resolved it?

We alerted the client right away and shared the relevant clauses from the contract documents.

Then we contacted the supplier and explained the situation calmly and factually. At first, they defended their proposal. But once we walked them through the documentation, they acknowledged the oversight and agreed to begin delivering the service without any additional charge.

That one intervention avoided €15,000 in monthly charges over the remaining 39 months of the contract. In total, that’s €585,000 saved.

Can past charges be recovered?

Possibly: since the service was never delivered over the past two years, and the supplier admitted it, the client may be entitled to service credits or retroactive compensation. It’s something we’re currently helping them assess.

But even without looking backwards, the avoided cost going forward speaks for itself.

Contracts are meant to be used: not just signed !!

This example shows why IT contract overcharge prevention isn’t about conflict, it’s about insight. The real value (and the real risk) lies in how contracts are used to manage suppliers, track obligations, and challenge what doesn’t align.

We didn’t renegotiate a thing. We didn’t escalate a conflict. We simply read the contract, compared it to what was being done, and asked the right questions.

Could supplier overcharging  happen in your organisation?

If you suspect supplier overcharging or if your suppliers are regularly sending proposals, change requests or add-ons, it’s worth asking:

• Are these services really new?

• Are you already paying for them under existing terms?

• Is someone validating contract compliance month after month?

We help companies do exactly that 🙂 Apply IT contract overcharge prevention methods that catch risks early, before they cost you real money.

U-NEGO helps companies prevent unnecessary costs by bringing visibility and control back to their IT contracts.

Start your own IT contract overcharge prevention journey today: contact us to learn how.