As with other phases of the contracting cycle, there are risks to successfully formalising a contract. Risks assessments conducted at earlier points of the cycle should be reviewed at this stage for relevance.
Risks to successfully formalising the contract can arise from a number of sources. These include:
Sources of risk | Examples of risks |
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Actions of the acquiring entity | • Unknowingly entering into a contract • Work commencing before the contract is signed |
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Contract negotiations | • Failure to focus negotiations on key outcomes • Failure of negotiating team to understand the extent of their authority • Negotiating team not having sufficient skills and experience and/or having required access to specialist advice • Final negotiated position adversely impacts on the value for money outcome • Agreeing to unnecessary or undesirable outcomes during negotiations • Failure to behave fairly and ethically | When finalising contracts, care needs to be exercised not to create a contract orally or by the exchange of non contract documents or letters. |
Final contract drafting | • Agreed outcomes not reflected in the final contract • Failure to obtain all necessary approvals by those delegated to give them • Failure to include all necessary contract clauses or including inappropriate clauses • Failure to establish the legal status of the contractor |
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