Open Book Contracting Support

Run open book contracts that build trust, control cost and protect your margin.

Our open book contracting support helps suppliers and buyers set up and run open book contracts that work for both sides. We shape the contract terms, governance, cost reporting and incentives, then help you manage the contract through its life. We designed a £20m incentivisation model for Villicare, with profit-sharing built in and contract schedules to match. Thinking of bidding for, or already running, an open book contract? Book a consultation.

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What is open book contracting?

Open book contracting is a way of driving commercial value for both parties, where the supplier and the customer work together transparently. Instead of keeping costs and risks hidden, the parties are "open". They discuss, agree and report actual costs throughout the life of the contract, which keeps the price competitive without inflated margins.

Open book contracts are especially useful when the customer's requirements are not clearly defined at the start, because they allow flexibility and adjustment as needs change. They are similar to "cost plus" contracts, but the focus is on partnership and delivering business outcomes, often with incentives, rather than only containing cost.

How the price itself is built – actual cost plus an agreed margin, cost plus or hybrid models – is covered on our open book pricing page.

Benefits of open book contracting

Open book contracting is not just about transparency. It is about getting the best commercial value for everyone involved. Both the private and public sectors use it, with contract provisions that require transparency and honesty and often link payment and profit to key performance indicators (KPIs). Open book contracting delivers real benefits when the level of openness is balanced against the contract's complexity, risk and potential gains.

Transparency about the cost of providing services is central to open book contracts. A clear view of service costs strengthens the contractual relationship and improves pricing, with flexible structures that reflect how the service actually performs.

Promotes transparency

These contracts depend on clear communication, so both parties know and agree all the costs involved. A tiered framework helps decide how much open book practice to apply, so the benefits of transparency outweigh the cost of providing it.

Encourages collaboration

The open approach builds a partnership, with trust and joint problem-solving.

Adds value

Open book contracts can create value throughout the project, by showing how performance affects financial results.

Prevents overspend

Good management means staying on top of costs, so the contract is delivered without unexpected spend.

What's included in our open book contracting support

We tailor our support to what you need, whether that is advice, bespoke tools or ongoing on-site support for the life of the contract. You can use the full service or pick the elements you need.

Open book suitability assessment

We assess whether open book is right for the contract, and at what level, using a tiered approach that balances complexity, risk and benefit.

Contract structure and open book terms

We help shape the open book provisions: what costs are shared, how often, how they are evidenced, audit rights and how disputes over costs are resolved.

Incentive and gain-share design

We design incentive mechanisms that link payment and profit to KPIs and outcomes, including gain-share and pain-share. See our article on enabling incentive-based contracting.

Open book cost model and reporting

We set up the cost model, cost collection and reporting packs the contract needs. For detailed model design, see our open book pricing service.

Governance and contract management

We set up the governance, review meetings and controls that keep an open book contract on track, and support you with ongoing management. See our contract management services.

Open book reviews and audits

We prepare for, or carry out, open book reviews and cost audits, checking costs against the contract and the agreed margin.

Supplier-side protection

If you are a supplier, we help you benefit from the arrangement while guarding your margin, intellectual property and commercial position.

Bidding for, or already running, an open book contract? Book a consultation and we will scope your support.

How we work

Engage us right at the start if you are bidding for an open book contract. Early involvement lets us shape the contract for success. If your contract is already under way, we can still step in to add value, improve compliance and support delivery.

1. Understand the opportunity or contract. We review the requirement or live contract, the open book provisions and your goals. Output: summary of open book position and risks.
2. Design the open book approach. We agree the level of openness, cost categories, margin, incentives and audit rights. Output: open book principles and incentive design.
3. Build the tools. We set up the cost model, reporting templates and governance schedule. Output: open book model and reporting pack.
4. Mobilise and govern. We help launch the contract, run the first reporting cycles and train your team. Output: working governance and trained staff.
5. Review and improve. We support regular open book reviews, audits and changes, and track value against the incentives. Output: review reports and agreed improvements.

Contract management best practices for open book contracts

Good contract management is the backbone of successful open book contracting. It keeps both parties aligned and the project running smoothly from start to finish. Follow these best practices:

1. Define the contract scope and objectives clearly. Make sure scope and objectives are precise and match the customer's requirements. This sets the right expectations and avoids misunderstandings.
2. Set key performance indicators (KPIs). KPIs measure the supplier's performance and confirm they meet the contract requirements and deliver the expected outcomes.
3. Review and audit regularly. Regular reviews and audits make sure the contract is being managed well, so deviations are spotted and corrected quickly.
4. Keep communication open. Open communication means issues and concerns are dealt with quickly, supporting collaboration.
5. Monitor and control costs. Watch costs closely and make sure they match the contract requirements, so the customer gets value for money.
6. Make sure of transparency and accountability. Clear lines of authority and decision-making keep the contract management process transparent and accountable.
7. Use technology to support contract management. Tools such as contract management software make contract management more effective and keep all parties working from the same information.

Following these practices helps your open book contracts deliver real benefits and value for everyone involved.

The role of technology in open book contracts

Technology supports open book arrangements by making transparent, accurate cost and price information easier to share, which builds trust and collaboration. Here is how:

1. Automated pricing systems let suppliers generate prices quickly and accurately from actual costs. Automation reduces errors and keeps prices up to date.
2. Real-time cost tracking lets suppliers monitor costs as they happen and give customers current pricing information.
3. Data analytics lets suppliers analyse costs in detail and find savings, so they can offer more competitive prices.
4. Online portals give customers access to pricing information and let them track costs in real time, so they can make informed decisions and confirm value for money.
5. Contract management software supports the management of contracts, making sure suppliers meet the contract requirements and deliver value for money. We provide contract management software through our partner ISPnext.
6. Electronic invoicing speeds up invoicing and reduces errors and disputes.
7. Supply chain visibility gives customers insight into the supply chain, helping track costs and confirm value for money.

With these tools, suppliers can share transparent and accurate cost information, and customers can make informed decisions and get the full benefit of open book arrangements.

Getting the best outcomes through transparent contracting

Effective open book contracts rely on transparency and lasting, trust-based relationships. In closed book contracts, the customer sees only fixed prices and not the cost structure behind them, which can reduce transparency and trust. Open book needs an organised approach and a good understanding of the processes, cost drivers and details of the contract in question.

The public sector often uses open book contracts, giving buyers insight into the supplier's cost base. This often saves the public sector money. But it raises a question for suppliers: how can your business benefit from the arrangement and guard against the risks? That is where our expertise helps.

When managed and facilitated properly, open book contracting is a collaborative approach that benefits both parties. We can guide you through it so you get its full value.

Proof: results from our commercial model work

£20m incentivisation model designed for Villicare

Villicare needed a commercial solution to achieve significant cost savings over five years, with incentives aligned for profit-sharing with its end customer. We designed the commercial model and solution structure, agreed the commercial principles with the end customer, developed the financial models and drafted the contract with supporting schedules. - Result: a £20m incentivisation model designed to meet the 5-year cost savings target, with a profit-sharing mechanism. - Read the Villicare case study

£9m saved through a revised contract model for Fujitsu

Fujitsu needed to mobilise a newly signed contract, put commercial policies and processes in place and resolve critical supplier issues. We mobilised the contract, helped the delivery team build commercial policies, processes and tools, and introduced a revised contract model for Break Fix Support. - Result: £9 million in savings. - Read the Fujitsu case study

More related results

• Contract management plan for Block Solutions, with a risk assessment and complex obligations matrix.
• £2m savings and supplier management framework for Johnson Matthey.
• NEC3 contract drafted for a £30m broadband project, including bespoke Z clauses.

Our own framework credentials

• G-Cloud 14 – Athena secures a place on G-Cloud 14
• DOS 7 (Digital Outcomes and Specialists), Lots 1 and 3 – Athena awarded a place on DOS 7

Sectors we support

Defence

Defence buyers often require cost transparency on non-competitive or long-term contracts. Our team holds Security Check (SC) clearance and has built defence cost models with full cost build-ups and sensitivity analysis.

NHS and health

Health bodies use open book arrangements to show value for public money, often linked to outcomes. Our Villicare incentivisation model shows how profit-sharing can align supplier and customer goals.

Construction

Open book contracts are common in construction, where scope and costs are hard to fix up front and frameworks often require cost transparency. We help contractors set up cost reporting and governance that satisfy the client and protect margin. See construction procurement frameworks for 2026.

Technology

Managed service and transformation contracts often use open book to handle changing requirements. We help IT suppliers and buyers agree cost categories, incentives and reporting that keep the relationship working.

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