Contract Management Tips
Contract Management can be very time consuming and it can mean many things, such as:
Developing a procurement plan that lays out contracts by department and tells the contract manager when the contract expires and whether there is a renewal option.
Ensuring contract compliance from all parties involved.
Coordinating with project managers to exercise options or closeout contracts.
Just these three items raise some questions. How does one organize and keep track of all this information? What do we do if the counter-party is not complying with the contract? How far in advance should we decide to renew or closeout a contract?
Luckily, this process can be simplified and streamlined by following the tips below:
Tip 1: Purchase a contract management software. There are quite a few out there and you can find them with a simple google search. The key functions should include the ability to sort contracts by department and furthermore, sort the expiration date by quarters. At a minimum you should be able to just select a date on the calendar and the contracts expiring on or before that date should pop up. The software should also detail when the project itself started and when the contract started.
Side note: The software should also tell you which department is actually paying for the good/service. Example, you may purchase software for HR but IT may be the one paying for it.
Tip 2: Frequent contact with the project manager (compliance issues aside, this should always happen) and documenting compliance issues is key. This helps with multiple things: first, you begin to get a feel for whether you want to renew the contract or find a new vendor. Second, this creates a paper trail of the issues you’re having in the event of a lawsuit. Keep in mind, a lawsuit should be last resort. Thus, you would start by alerting the counter-party to the issue. Then set up a meeting during which you discuss an agreeable cure to the issue and an agreeable deadline for which the cure is due.
Tip 3: Frequently review the contract files. Ideally the contract management software will send automated alerts of when contracts are about to expire. Thus when you get the expiration alert, you can go to that contract and review the file for performance issues and you’’ll have an understanding of the lead time needed to replace the contract.
Just following these three tips will help make contract management a world easier. And after-all, as contract managers, part of our job is to streamline the process and make it as efficient as possible. And while there is still much to do, these three tips do a lot of the heavy lifting and will make life much easier.
