Vendor comparison matrix for renewal decisions

Use this workflow when a supplier contract is due for renewal and you need one decision pack, not a collection of emails and spreadsheets. You will produce a weighted comparison matrix, a short recommendation, and a clear handover for the budget holder.

1. Set the decision question and deadline

Write the decision question before collecting evidence. Put it at the top of a working document:

Should we renew, renegotiate, re-tender, or exit Supplier A for [service] from [date]?

Then record:

• Decision owner: the budget holder who approves or rejects the recommendation.
• Contract owner: the person responsible for the supplier relationship.
• Deadline: the latest date that allows for notice, approval and onboarding if needed.
• Options: renewal as quoted, renewal with negotiated changes, alternative supplier, or internal replacement.
• Non-negotiables: requirements that rule an option out, such as required operating hours, site coverage, security requirements or integration support.

Do not start with a preferred supplier. A matrix is only useful if each option is tested against the same criteria.

2. Assemble one evidence pack

Create a folder called Supplier renewal - [supplier] - [year]. Add the source files and give each one a clear date.

Use these inputs:

Input	What to extract	Owner to confirm
Current contract and amendments	term, notice date, service scope, price mechanism, commitments, exit duties	Contract owner
Renewal quote and alternative quotes	total charge, assumptions, exclusions, validity period, implementation costs	Procurement or supplier manager
Service records	SLA performance, incidents, missed visits, response times, corrective actions	Service delivery lead
Finance records	invoices, credits, unplanned charges, disputed amounts	Finance partner
Stakeholder requirements	must-haves, operational pain points, expected demand changes	Service users
Risk and security evidence	outstanding audits, incidents, insurance or assurance requirements	Risk or security owner

Keep facts separate from opinions. For example, six missed collection windows in Q2 is evidence. unreliable supplier is an interpretation that needs evidence behind it.

Before you upload documents or paste internal records into the model, follow your organisation's data handling rules. Available features and document handling are version-dependent, so check the xAI documentation overview for current guidance.

3. Build the criteria and weights

Ask the people affected by the service to agree the criteria before scoring suppliers. Limit the list to five to eight criteria. More than that usually creates false precision.

A practical starting matrix is:

Criterion	Suggested weight	What a high score means
Service performance	25%	Consistently meets agreed service levels with few serious incidents
Total operating cost	20%	Clear, comparable cost with limited unplanned charges
Contract and commercial fit	15%	Acceptable term, notice, price changes and flexibility
Operational fit	15%	Meets coverage, capacity, systems and process needs
Risk and assurance	15%	Evidence meets required controls and risks are manageable
Transition effort	10%	Low disruption, realistic implementation plan and clear ownership

Change the weights to reflect the decision. If a service failure would stop operations, increase service performance and risk. Record who agreed the weights and when. Make the weights add up to 100%.

Use a five-point scoring scale:

• 5: exceeds the requirement with strong evidence.
• 4: meets the requirement with minor gaps.
• 3: meets the minimum requirement, with conditions to manage.
• 2: material gap or weak evidence.
• 1: does not meet the requirement.
• 0: fails a non-negotiable requirement.

For each option, calculate weighted score = score ÷ 5 × criterion weight. Add the weighted scores. Keep the underlying score and the evidence reference visible.

4. Use the model to structure, not decide

Give the model a controlled task. Paste the agreed criteria, weights and source extracts. Identify each source, for example Service report, April to June or Renewal quote, received 14 May.

Use this prompt:

Create a supplier renewal comparison matrix from the evidence below.

Use these criteria and weights: [paste them].
Score each option from 0 to 5. For every score, cite the source name and state the evidence in one sentence.

Do not infer missing contract terms, costs or service results. Mark missing evidence as “not evidenced”. Flag any non-negotiable failure separately.

Then provide:
1. a weighted score table;
2. the three strongest reasons for each option;
3. the key assumptions and evidence gaps;
4. a draft recommendation of no more than 180 words for the budget holder.

Evidence:
[paste labelled extracts]

Do not ask the model to read between the lines of contract language. It can organise clauses and identify questions, but the contract owner and appropriate qualified reviewer must confirm the meaning and obligations.

5. Check the matrix against the source documents

This is the step that makes the recommendation defensible. Review every score of 4, 5, 0 or 1, because these scores drive the result.

Look for these common errors:

If you see this	Check this	Do this next
A low price wins clearly	Costs are on the same basis	Add excluded charges, transition costs and volume assumptions
The current supplier scores highly	Service reports cover the whole period	Check incident logs, complaints and credits as well as SLA summaries
Contract flexibility is scored well	The clause is explicit	Ask the contract owner to verify notice, renewal and change terms
An alternative scores well with little evidence	Evidence is being assumed	Reduce the score or mark it not evidenced

Read the recommendation without the score total. If the written reasons do not support the proposed action, the weighting, scoring or evidence is wrong. Also run a simple sensitivity check: increase the most important criterion by 10 percentage points and reduce another by 10. If the preferred option changes, tell the budget holder that the decision depends on agreed priorities.

6. Prepare the budget-holder pack

Send a short pack with four sections:

1. Decision required: the action, supplier, term or next step, and approval deadline.
2. Comparison matrix: options, criteria, weights, scores, evidence references and eligibility status.
3. Recommendation: one preferred option, two or three reasons, and the trade-offs.
4. Conditions and next actions: negotiation points, approvals, evidence gaps, owners and dates.

State the recommendation plainly. For example: Proceed with a conditional renewal, subject to a revised service-credit clause, confirmed volume pricing and closure of the open assurance action. This is a draft operational recommendation. The budget holder makes the approval decision.

When the workflow does not work

Stop and reset the comparison if the quotes cover different scopes, the contract documents conflict, or stakeholders cannot agree the non-negotiables. Do not force a total score from incomplete evidence.

Create an evidence-gap list instead. Assign each gap to an owner, set a response date, and hold the recommendation until the gap is closed or the decision owner explicitly accepts the risk. If time is short, present the options as approve, defer pending evidence, or run a short re-tender, with the operational consequence of each.