Body of law that governs oral and written agreements associated with exchange of goods and services, money, and properties. It includes topics such as the nature of contractual obligations, limitation of actions, freedom of contract, privity of contract, termination of contract, and covers also agency relationships, commercial paper, and contracts of employment. (BusinessDictionary)

Contract Management is the key to any successful project, sourcing and procurement department performance, and risk reduction and management.

Different Types of Contracts

Contracts are one of the most common legal transactions you’ll encounter while running a business. Regardless of what type of business you run, it’s important to understand what types of contracts there are, and which ones are appropriate for your organization.

      • Lump Sum or Fixed Price Contract Type
      • Cost Plus Contracts
      • Time and Material (T&M) Contracts
      • Unit Pricing Contracts
      • Bilateral Contract
      • Unilateral Contract
      • Implied Contracts
      • Express Contracts

With ever-changing business opportunities and the domestic and global economy constantly fluctuating, a great deal of topics is necessary to be considered and as far as contracts and contract management, RREVENU can assist in a variety of services that are related to sourcing, procurement, and contracts. Sample of such services are as follow:

      • Contract writing and reviews including, but not limited to Non-Disclosure Agreements (NDAs), Statement of Works (SOWs), Request for Proposals (RFPs), Request for Information (RFI), Request for Quotes (RFQs), Mutual of Understanding (MOU), master subcontracts, partner agreements, term sheets, and other commercial documents relative to compliance and business development
      • Develop project strategies in line with corporate contractual requirements to solve complex technical challenges related to sourcing and procurement
      • Handle contract activity with moderate to high risk inclusive of working with complex business units such as finance, procurement, engineers & product development and sourcing
      • Review business requirements and present various pricing strategies and models
      • Work alongside Senior Category Managers and the Director of Procurement to ensure all vendor contracts are legally sound and provide maximum revenue to the organization
      • Coordinate and/or develop solicitations, contracts, and amendments by identifying provider resources, describing services to be rendered, evaluating information supplied by bidders, and negotiating contract specifications
      • Coordinate and facilitate procurement-related meetings such as kick-off and pre-proposal meetings, post-award conferences, team briefings, and evaluation scorings
      • Provide guidance to internal and external stakeholders regarding contract and procurement administration, policies, and procedures
      • Drafting, reviewing and negotiating a variety of agreements including technology, licensing, services, outsourcing, and confidentiality
      • Draft contractual provisions based on corporate strategies, legal and regulatory compliance, contract standards and pricing components
      • Identify areas of risk, provide negotiating strategies and support the initiatives of senior management or other stakeholders to ensure contractual terms are aligned with company standards, to maximize value and minimize risk
      • Assure accuracy and appropriateness of contract terms and conditions
      • Identify opportunities and develop recommendations to improve contracting processes and management system
      • Update contract templates and analyze changes to standard template provisions in contracts being negotiated
      • Contract Database Management, Contract Management, and Contract Negotiations
      • Provide direction, recommendations, and relay sound decisions on business matters that affect profitability, mitigation of contractual risks, and performance during sourcing and procurement process
      • Develop and implement contracting policies and procedures and applies independent judgment and foresight to continuously adapt such contracting practices to ensure changes to business strategies do not result in breakdown of practices or hinder flow of business
      • Monitor and document contract compliance via metrics to ensure delivery of agreed upon terms by the provider to company
      • Organize and assist in presenting orientation and training programs for sourcing and procurement team members particularly in the area of legal and compliance
      • Prepare statements of issues presented; develop plans for resolution; identify and communicate with internal and external information sources, and gather, review, analyze and summarize information for senior leadership
      • Gain global understanding of the business through the aggregator model (Aggregator Model is a networking E-commerce business model where a firm, known as an Aggregator, collects (or aggregates) data pertaining to goods and/or services offered by several competing websites or application software’s (commonly known as apps) and displays it on its own website or application software.)
      • Ensure elaboration of the Contract Document Requirements List (CDRL) by the Project team members is launched in time, and ensure it is accurately communicated and updated, and to check all schedule and milestone compliance

Contract Management Key Performance Indicators (KPIs)

According to KPILibrary: KPIs help to get insight in your business performance — “What gets measured, gets managed”. KPIs are also known as performance metrics, business indicators, and performance ratios. As Peter Drucker famously said, “What gets measured gets done.” Peter Ferdinand Drucker was an Austrian-born American management consultant, educator, and author, whose writings contributed to the philosophical and practical foundations of the modern business corporation.

Contract management KPIs measure progress and accomplish goals against contracts thus, driving actions to complete projects. defines KPIs as “critical (key) indicators of progress toward an intended result. KPIs provides a focus for strategic and operational improvement, create an analytical basis for decision making and help focus attention on what matters most.”

The KPI Institute is a wonderful resource for research and certification programs. In accordance, several KPIs in relation to contract management that may be considered are as follow:

      • Contracting Cycle Length
      • Consistent Quality
      • Schedule Adherence
      • Cost Effectiveness
      • Annualized Contract Value (ACV)
      • Terminated Contract Remaining Value (TRV)
      • Order Value Variance from Original Contract Value (OVV)
      • Vendor Fraud
      • Contract Compliance
      • Quality/Complaints Resolved
      • Contract Efficiency
      • Contract Efficacy
      • Contract Risk
      • Delays in Approvals and Cycle Times
      • Missed Milestones or Contract Obligations Performance
      • Agreements Expiring Without Renewal

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