You may need to manage a contract transition if:
• you still need goods or services after the completion of one contract and
• you are moving to a new contract.
The new contract may be with the existing supplier, or a new supplier.
The transition from one contract to another can be a period of risk. Check your contract to see what has been included about transitioning out. If your contract requires a transition out plan or checklist, ensure it is in place prior to the transition. If the contract requires a transition plan, ensure it:
• meets the timeframes and requirements under the contract
• can manage your entity's risk associated with the transition.
A transition out plan needs to be arranged before the end date and should be done before your approach to market for the new contract.
Ensure you understand, record, manage and enforce the obligations of the transition plan on the outgoing supplier, as well as your own entity's obligations to the supplier.
Some typical transition issues are: | |
a. | Developing a timeline of activities/events, including change over periods. |
b. | Identifying resource requirements. |
c. | Identifying key roles and responsibilities and how these change with the transition. |
d. | Identifying specific differences between the current and future contracts. |
e. | Considering training requirements. |
f. | Identifying risks and applying risk management to maintain continuous supply of goods or services and managing effects on customers. |
g. | Considering matters connected with return of your entity's fixed assets and/or information. |
h. | Determining and dealing with any transitional arrangements that need to be negotiated with the incoming or outgoing supplier. |
i. | Managing the outgoing supplier's performance through to the conclusion of their contract. |