Advanced Contracts Management

Introduction

In every organization, the effective expenditure of enormous sums of money and resources is dependent on successful contract management activities. Selecting the appropriate contracting models and creating and managing formal agreements with suppliers of goods and services requires not only a complete understanding of the business requirements and organization needs but also depends on keeping up-to-date on contracting. This course is designed to:

• Explore the advanced practices generally viewed as leading to World-Class performance in contract selection, development, and management
• Enable participants to determine where they are now
• Help participants to begin immediate implementation of the steps needed to create maximum total value for their organization

Objectives

By the end of this course participants will be able to:

• Be more effective in contract management activities
• Select the appropriate type and form of contracts for different situations
• Anticipate problems and manage risks
• Integrate contract management with contract needs
• Understand the best means of handling disputes and performance issues
• Establish terms and conditions for different situations
• Have the latest advances in contract selection and management

Target Audience

This course is suitable for personnel from all industrial fields and different purchasing methods, eg:

• Engineering
• Projects
• Construction
• Tenders
• Contracts
• Buying
• Purchasing
• Procurement
• Commercial
• Finance

Those new to the function, preparing for a major project, or experienced managers looking for a refresher will also benefit from this course.

Purchasing & Logistics Outline

The course covers the following topics:

The Basis of Contracting

Principles of Good Contracting

• Why do we use contracts?
• Key steps in the creation of a Contract
• Essential elements of a valid contract
• Overview of Tendering and Contract Award Process
• Advantages of tendering and some pitfalls to avoid
• Distinguishing price and values
• Other Types of Obligation Documents
• Bonds and guarantees
• Letters of intent and award - are they contractual?
• Letters of Comfort - Do they mean anything?
• Side letters - why they can be dangerous
• When to Obtain Legal Advice
• Law of Agency
• Authority to sign contracts

Organizing strategies for Contract Management

• Defining Contract Management Responsibilities
• Basic contract planning
• Communication and managing expectations

Risks and selecting the right contract structure

Assessing and allocating risk

• Identifying Risk
• Apportioning Risk
• Incorporating Risk Assessment and Management
• Selecting types of contract
• Traditional - lump sum, schedule of rates, reimbursable, etc
• Alliance partnering
• Warranty Management

Major Contract Terms to aid the handling of performance issues

Effective handling of Contract Performance issues

• Design and Specification
• Work Ordering Process
• Obligation to perform work
• Transfer for ownership
• Risk of damage
• Contract Administration
• Reporting Mechanisms
• Cost Control
• Recovery Clauses - Acceleration
• Insurance and Indemnities
• Termination and suspension

Managing Change within a Contract

Understanding change

• Changes to the contract documents
• Variations in scope
• Increases and decreases
• Change in timing
• Change in method of working
• Managing change
• Risks of uncontrolled change

Developing Contract Terms and Conditions

• Finding Contract Templates
• Using standard form documents
• Modifying standard forms
• Drafting special conditions
• Issues for subcontracts

Resolution of Disputes

Eliminating sources of Contract disputes

• Errors and omissions
• Anticipating and avoiding Conflicts
• Dealing with Unknowns
• Tracking Changes
• Managing Expectations

Resolving disputes

• Negotiation
• Stage processes
• The need for compromise
• Negotiation techniques
• Litigation
• Arbitration
• Alternative Dispute Resolution
• Expert determination
• Early neutral evaluation
• Mini-Arbitration
• Mediation
• Pendulum Arbitration
• Dispute Review Board and similar arrangements

The future in the Middle East

• Revisiting Strategic Alliance and Partnering Agreements and BOTBOOT
• Prime Contracting and other Consolidated Sourcing Contracts
• Online Contracting and e-tendering

Contract Management Review and Summary

• Course highlights and final observations