Lost my activity programming contract on a line I wrote myself

On the management side I'd have flagged your invoice trend at about month nine, not at rebid. If nobody at the property told you the run rate was becoming a problem, that's a communication failure on their side too. Did you ever get a mid-term conversation about the escalation, or did it just show up in the rebid as a comparison?

The other thing. A 61 percent participation rate at 240 units is a genuinely strong number and it's worth something in renewals and referrals. You had the case, you just needed the retention data attached to your invoice. If you can show programming participation correlating with renewal rate, the $268k stops being a cost line.

So the successful thing became the expensive thing. That's grim and I can see how it happens.

The pricing structure is the whole answer here and the assumption it depends on is who bears volume risk.

Participation-based staffing with a floor and no ceiling puts all volume risk on the owner. Owners of active adult assets are underwriting to a fixed operating expense per unit, usually reviewed annually against a budget they've committed to lenders. A line item that grew from $186k to $268k, roughly $775 to $1,117 per unit per year, breaks that budget without any corresponding rent action they can take mid-lease. From their seat, a flat $190k with a 3 FTE cap is worth more than a variable $268k even if the variable version produces better outcomes, because they can plan around it.

The structure that would have held is tiered with defined steps. Bands by participation, each band with a fixed fee, and a written trigger to move between bands, usually a rolling three-month average with 60 days notice. The owner gets a small number of possible outcomes instead of an open range. You get compensated for growth.

@trellis is right that the retention link is what makes the higher band defensible, but only if it was measured before the rebid. Participation rate on its own is an activity statistic. Participation correlated to renewal rate on the same resident cohort is a revenue argument, and that data has to be collected while you hold the contract.

One caution on how you rebuild. Scaling staff against a contract with no ceiling created your severance exposure. Whether that severance was owed, and on what terms, depends on your employment agreements and your state, so that's a question for an employment attorney rather than a forum.

The tier idea took me two passes to follow. So instead of one price that moves with participation, you'd have say three prices, and you only change price when participation stays in a new band for a while? That seems obviously better and I'm surprised it isn't standard.

@juniper it isn't standard because in year one the vendor wants the contract and the variable structure lets them quote a low opening number. Beacon's $186k probably beat a flat competitor at the original bid for exactly the same reason the flat competitor beat him at rebid.

Beacon, the part I'd sit with is the second-order damage you named. You taught the owner that programming is elastic. The next vendor inherits a 3 FTE cap on a property where residents now expect 61 percent participation support. That cap will fail, and there's a decent chance you get called back in eighteen months. Keep the participation and renewal numbers you have. They'll be the only record of what the property was actually running at.