Tendering processes are often positioned as a straightforward way to improve cost, service, and supplier performance.

In reality, the outcome is only as strong as the clarity you have before the process begins.

We recently ran a tender exercise that we ultimately had to pause and withdraw.

Not because the market wasn’t competitive, but because a key factor only became fully visible partway through the process: significant exit and transition costs within the incumbent contract.

These costs weren’t part of the headline pricing. They were embedded within the commercial terms and only surfaced once replacement scenarios were properly modelled.

It highlighted a common issue we see across procurement activity:

Decisions are often made based on the cost of going forward, without fully understanding the cost of coming out.

Other frequent challenges include:

Overlooking termination clauses and notice periods
Assuming contracts are more flexible than they actually are in practice
Hidden decommissioning, removal, or transition charges
Commercial lock-in through bundled services or dependencies
Underestimating operational disruption costs during changeover

The lesson isn’t that tendering doesn’t work – it’s that effective procurement starts before the tender is issued.

Understanding the true cost of exit is just as important as understanding the cost of supply. Without both, you’re not comparing suppliers, you’re comparing assumptions and assumptions rarely hold up once implementation begins!