OpenPass true up and true down provisions

Most enterprise agreements flex in one direction only. Usage rises and the buyer pays more at the next true up; usage falls and the buyer pays exactly the same. OpenPass true up and true down provisions are where that asymmetry is set, and the buyer who reads them late inherits a contract that captures growth automatically and ignores contraction entirely. The provision looks like an administrative clause about periodic reconciliation. It is in fact the mechanism that decides whether the agreement is a fair measure of consumption or a one way ratchet that only ever moves the number up.

A true up is the scheduled reconciliation where measured usage above the licensed baseline is purchased. A true down is the mirror image: a reduction in the licensed baseline, and the fee, when measured usage falls. Vendors include the first as a matter of course because it works in their favour. The second is rarely offered and almost never volunteered, which is precisely why it is worth negotiating. An estate that consolidates, divests, or simply uses less than it forecast should not be locked into paying for capacity it no longer touches.

Why the true up is built in and the true down is not

The reason the true up appears by default is straightforward: it is the contractual replacement for an audit finding. Rather than waiting for a compliance review to discover overuse and price it at full list with back maintenance and audit cost stacked on top, the true up lets the vendor collect for growth on a predictable schedule. From the buyer's side that predictability has value, because it converts a punitive remedy into an ordinary purchase. But the same logic that justifies the true up justifies the true down. If the agreement reconciles upward when consumption grows, fairness says it should reconcile downward when consumption shrinks. The vendor's draft will simply omit the downward case, and silence in the contract means the baseline only rises.

What a usable true down right looks like

A true down provision is only as good as its mechanics. The right should specify how often the baseline can be reduced, by how much, and on what evidence. A true down that can only be exercised once at renewal, after years of paying for unused capacity, is worth far less than one that reconciles on the same cadence as the true up. The provision should also define the measurement on which a reduction rests, so that the buyer is not forced to prove a negative against a metric the vendor controls. This is the same discipline that applies to every defined term in the agreement, which is why true downs belong with the broader work of pinning down defined metrics in an OpenPass enterprise agreement rather than being treated as an isolated clause.

The buyer should also watch the floor. Vendors that concede a true down often cap how far the baseline can fall, fixing a minimum commitment regardless of actual usage. A floor set close to current consumption neutralises the right entirely. The negotiation is about both the existence of the true down and the level of the floor, and the two should be considered together against a realistic view of where the estate is heading.

Capping the true up against real growth

The other half of the provision is the true up itself, and an uncapped true up can be as damaging as a missing true down. If the agreement allows the baseline to rise without limit at each reconciliation, a year of unusual growth, a temporary project, or a measurement artefact can permanently inflate the commitment. The buyer should negotiate a cap on how much the baseline can rise in any single reconciliation, and should ensure that temporary or non production usage does not feed the permanent baseline. The way growth is absorbed deliberately, rather than captured automatically, is the subject of OpenPass capacity and growth allowances, and the two provisions should be drafted in tandem so that growth is metered fairly in both directions.

Capping the true up also intersects with price protection. A baseline that rises is repriced at whatever rate the agreement allows, so an uncapped true up combined with weak uplift terms compounds quickly. Aligning the true up cap with the price hold and uplift protections keeps both the quantity and the unit price under control at the same reconciliation.

How the provision behaves under an audit

The true up and true down provisions matter most when an audit is in the picture, because they change what a finding even means. In an estate with a well drafted true up, growth that the vendor might otherwise present as overuse is simply the next scheduled reconciliation, priced at agreed terms rather than at full list. In an estate without one, the same growth becomes a finding with the full remedy stacked behind it. This is one of the reasons converting a finding into a structured agreement is so valuable, a process set out in converting an audit finding into a clean OpenPass deal. A true down right, meanwhile, gives the buyer something to point to when usage has fallen and the vendor's measurement has not caught up.

How this works in practice

In a recent engagement, an estate that had consolidated several business units found itself paying against a baseline set before the consolidation, with no contractual route to reduce it. The agreement contained a true up that had quietly raised the commitment during a prior growth phase, and no true down to release it when the estate shrank. The defense reconstructed actual consumption, demonstrated the gap between the licensed baseline and real usage, and used that position to negotiate a true down right with a reconciliation cadence matching the true up, along with a cap on future upward adjustments. The agreement became a measure of what the estate used rather than a record of its highest historical point. The reconstruction discipline behind that work runs through the whole of our approach, set out in the complete OpenText audit defense playbook.

Negotiating both directions at once

True up and true down provisions should never be read in isolation from each other. Concede the true up without securing the true down and the agreement only ever climbs. Win the true down but leave the true up uncapped and a single reconciliation can undo years of discipline. The buyer's position is to insist that the agreement flexes both ways, on the same cadence, with a cap on upward movement and a floor set below realistic consumption rather than at it. This is core to negotiating the agreement as a whole, which is the work of our OpenPass enterprise agreement negotiation track, and it is most defensible when it rests on an independent baseline rather than the vendor's numbers, as set out in building an OpenPass target baseline before negotiation. If you are entering or renewing an OpenPass agreement and want the reconciliation to work in both directions, open a case before the next true up locks the baseline in.