10 Ways to Better Value Procurements #4 – Contract Mgmt

The time to plan for effective contract management is before there is a contract and is best done at the Request for Proposals (RFP) development stage of the procurement. Contracts for delivery of goods and services over time require greater attention to contract management than other supply contracts. Why – because over time, things change.

You will get greater value from your contractor when there is an agreed and understood process to manage changes in scope, delivery, price and other factors during the contract term. Less time will be spent in negotiation and with expectations understood by all parties before the contract; there is a better contractual relationship.

Some of the Issues to be Addressed at RFP Stage:

• Clarity in scope of work – see #9 in this series;
• Who will be, and qualifications of, the key relationship managers;
• What constitutes acceptable performance;
• What may happen if performance expectations are not met;
• How changes in scope will be managed – will unit costs apply or another method considering fixed and variable costs of the contractor;
• How will changes in prices be managed/implemented;
• What are the invoicing and payment requirements;
• What reports and information will be provided during the contract term? This topic is addressed further in the next installment of this series.

Effective contract management planning will avoid the costs associated with negotiations conducted in rush situations where the contractor may have an undue advantage.
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Other Posts in the series: How to Add Value to Your Procurements
• Be Proactive
• Analyze what is required – bring clarity to the specification
• Understand the supply chain
• Align procurement strategies with corporate strategies
• Apply the highest standard of ethics
• Use the right tool for the job
• Plan contract management before there is a contract
• Learn from what was done
• Mitigate procurement risks
• Utilize the skills of supply management professionals

Over the coming year, Rusty Joerin, guest blogger, will expand on the above. Your comments are welcomed.


Rusty James Joerin, C.P.P. is a Supply Chain Management Professional and accredited by the Purchasing Management Association of Canada as a Certified Professional Purchaser. He offers procurement services primarily to public sector organizations that do not have a professional supply manager on staff and provides additional capacity to assist with project related supply for those organizations with purchasing specialists on staff.
Information about his experience and qualifications may be found at:www.woodsgift.com