How to Kill a Zombie Contract

A Zombie Contract is a contract that never dies. It is not current, brings little value, is not actively managed or measured but just continues to live on inside your organization. I find many Zombie contracts are grandfathered into a department and just wander around the halls looking for new brains to drain. Everyone hates the service and never hears from the supplier, but they have no idea how to kill the thing because it has always been stumbling around. Many folks managing the program find themselves in a temporary carrier placement and don’t want to rock the boat, so they just leave the thing fester around for the next poor soul.

I am amazed at how organizations seem to be all freaked out when it comes to killing zombies. When someone hears the word “contract” they think that if they take any action, the provider’s entire legal system is going to unleash a hoard of zombie lawyers on them. In reality, most of them are fairly easy to kill.

Killing Zombies 101-step one:

  • Try not feeding them: If no one feeds them they will go away. If it’s a zombie contract, chances are, the provider doesn’t even know you’re a customer. We once had a call from a competitor a year after we brought a new account onboard, insisting that it was their account. The zombie finally got around to making a call on their account, only to discover it was gone for a year.
  • Find the contract: Ask procurement for a copy. You may find that it doesn’t exist. If there is a contract, what is the maturity date and when does it expire? You may be surprised to find that it has expired several years ago.
  • Look for the satisfaction clause or cancellation clause: Most every contract has a satisfaction clause; in many cases, either party can exit a contract given proper notice for any number of reasons. (Usually with 30 days’ notice).
  • What is your company’s policy on the exclusive use of a supplier? There are very few companies that have any sort of exclusivity when it comes to suppliers. In fact, most organizations demand that you have at least two suppliers in any agreement, in the event one is not performing or turns into a zombie.

Step two: Arm yourself with a backup plan; send out a quick email to the zombie’s competition, or to the poor sales rep that’s been calling on your account for years. Ask for information and pricing; see what is on the market. If the contract has been wandering the halls for years, chances are very good that you are not getting the best service or price that is currently available. Talk to suppliers, providers, or a consultant, and have them take a look at or benchmark your program.

Once you have a good idea of what is on the market, you can either go to RFP, which can be a little daunting, or, if you have a relatively basic program, simply test drive some of the other suppliers. If you see a marked difference in the service levels, then take out the machete and kill the contract once and for all. All it takes is one brave soul to end the cycle. Even if your position is only a temporary stepping stone, you will go down in history as a zombie slayer, and rid the department of the brain-eater once and for all.

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