Procurement & SCM
Price Benchmarking
Compares prices paid for common items against benchmark ranges.
Why Prices Paid Need Comparison
Paying materially above market for common goods erodes value for money, the core objective of section 217 procurement, and can mask overpricing or collusion. Without a benchmark, an institution cannot tell a fair price from an inflated one. AuditPro Core compares prices paid against benchmark ranges so outliers are identified for negotiation, recovery or investigation rather than passing unchallenged.
The Numbers
AuditPro Core renders this view from your tenant's live, tamper-evident records. The figures below are illustrative sample data.
Items Benchmarked
1,860
common catalogue
Above Benchmark
312
16.8%
Potential Overspend
R 19.4m
estimated
Below Benchmark
421
good value
Price Paid vs Benchmark (R per unit)
Largest Price Variances
| Item | Vendor | Variance % | Overspend (R'000) |
|---|---|---|---|
| Item C | Vendor 0471 | 67 | 4120 |
| Item A | Vendor 0312 | 40 | 3480 |
| Item E | Vendor 0588 | 35 | 2960 |
| Item B | Vendor 0149 | 9 | 1240 |
| Item D | Vendor 0623 | 3 | 640 |
Figures shown are illustrative sample data for demonstration. AuditPro Core renders these views from your own tenant's live, tamper-evident records.
Establishing the Benchmark
Benchmarks draw on transversal contracts, historical pricing and comparable institutions to define a reasonable range per item. The benchmark is a range, not a single number, because legitimate prices vary by volume and location.
Reading the Outliers
Prices well above the range warrant scrutiny for overpricing, while prices well below may signal quality compromise or error. Both tails carry information worth investigating.
Like-for-Like Comparison
Comparisons must hold specification, quantity and delivery terms constant, or apparent overpricing may simply reflect a different product. Normalising the comparison is what makes the benchmark credible.
How AuditPro Core Bridges the Gap
- Benchmark comparison: unit prices paid are tested against reference ranges per commodity.
- Outlier flagging: transactions outside the range are isolated for review with the variance quantified.
- Normalisation logic: comparisons account for specification and quantity so like is compared with like.
- Audit-ready export: the benchmarking results export to support value-for-money reporting.
Key Takeaways
- Without a benchmark, value for money cannot be assessed.
- Benchmarks are ranges, reflecting legitimate variation by volume and location.
- Both unusually high and unusually low prices merit a look.
- Compare like for like, or the benchmark misleads.
See This on Your Own Data
AuditPro Core renders this dashboard from your tenant's live, tamper-evident records — every figure traceable to source.