Maverick Spend

A company negotiates prices and terms, yet staff sometimes buy outside the agreed route, which is often called maverick spend or maverick buying. The purchase may still be useful, but it can miss contracted discounts and approval checks.

The aim is to understand why it happens, not simply blame every employee who needs supplies quickly. CIPS describes the challenges of off-contract spending, and procurement adviser GEP discusses reasons staff bypass a formal process.

These sources explain patterns and possible controls, not a universal rate for every organisation, so define the company's own buying rules before measuring non-compliance. A purchase can be off-contract if an approved supplier agreement covers the item but a buyer chooses another vendor, which is a separate issue from buying without an approved purchase order; these may overlap, but not always, so a firm should specify which behaviours count in its metric and distinguish authorised exceptions.

Slow approvals can drive workarounds: if an engineer needs a replacement part urgently but the requisition takes two weeks, they may use a corporate card. A faster path for critical purchases may reduce risk more effectively than a blanket prohibition, so require a documented reason and later review for genuine emergencies.

Poor catalogue data is another cause, since staff may not know that an approved supplier offers the product or the item may be listed under an unfamiliar name, and searchable catalogues and clear contract owners make the compliant path easier because training alone will not fix a hard-to-use system. Start with clean spend data by bringing together invoices, purchase orders, card transactions and supplier names, then map vendors with multiple spelling variants and tag purchases by category.

Match purchases to contracts that were active on the purchase date, because a current contract should not be applied retroactively to earlier buying. Calculate an indicative off-contract rate by dividing off-contract spend by total addressable spend, so if $1.5 million of a $10 million addressable category was off contract, the rate is 15%.

Clearly define what is addressable and how emergency exceptions are treated, since including payroll or taxes in the denominator would make the rate misleading. Segment the exceptions, because a few high-value purchases at one site may deserve a different response from many small card payments across the business, and look for recurring items, suppliers and reasons, as a pattern of urgent purchases may indicate poor forecasting while a persistent preferred vendor may indicate the approved supplier is not meeting needs.

Review contract performance before enforcing use, because an approved vendor that repeatedly misses delivery deadlines can push buyers to alternatives, so procurement may need to renegotiate service levels or add a second approved supplier, and requiring use of a broken arrangement can damage operations and encourage concealment. Set a practical threshold and approval route for exceptions so staff know who can authorise an alternative supplier and what evidence is needed, and keep an exception log that preserves the reason, supplier and spend; an approved exception should not be hidden from the metric but reported separately.

Prevention can include preferred-supplier catalogues, purchase-order controls and card limits, but controls should not block a genuine safety or operational emergency, and they should be tested for new bottlenecks, since a rule that only shifts purchases to expense claims makes the data less complete. Maverick spend is a signal about purchasing design and behaviour, so define it consistently, measure against addressable spend, investigate causes, and strengthen contracts and approvals where they work while fixing the process where they do not, because the goal is a safe, usable buying route that people will follow.