Evergreen Contract

An automatic contract extension. Vested agreements often create an Evergreen Contract where the supplier earns a contract extension at the end of each year. For example, at the end of year one the supplier can earn a 6th year. At the end of year two the supplier can earn a 7th year. This in essence creates an Evergreen Contract with a rolling five-year contract duration that highly motivates the supplier to keep making investments in order to earn the contract extension.