Good contract management requires a complete set of the contract documentation and a clear understanding of each party's obligations under the contract. If you are managing a contract (work order) under a deed of standing offer (panel), make sure you have a copy of that deed to understand the obligation on that supplier. If you were not involved in the sourcing process talk to the sourcing team to understand any significant issues or risks relating to the contract and the procurement process, particularly details of any tender negotiations and rationale for any changes. They will also be able to detail the drivers for the assessment of value for money so you will understand what provisions you should keep an eye on during the contract performance phase.
Obtain a copy of the supplier's tender response to understand factors around what they have offered and any additional details on how the costs were broken down or inclusions that are factored into the price.
Key steps in this activity include: | |
a. | Read the contract. |
b. | Ensure you understand what is to be delivered under the contract and the outcomes to be achieved by the contract. |
c. | Identify the drivers to achieve value for money. |
d. | Identify all obligations in the contract for both parties. |
e. | Identify the rights available to the entity to ensure compliance by the other party such as, delivery and acceptance requirements, reporting, performance criteria (eg Service Level Agreements (SLAs) or Key Performance Indicators (KPIs), process for dealing with unsatisfactory performance, process for issuing breach notices and process for the escalation of issues. |
f. | Include relevant information in your contract management plan (see step 0.1). |