Professional Documents
Culture Documents
Unit 1: Building Successful Partnerships in the e-Business Age The Executives Role
Unleashing Buying and Selling Power Changing Buying and Selling Processes Developing an Integrated Supply Chain Learning & Applying Best Practices & e-Tools from Industry Leaders
Reference Text World Class Contracting, By Gregory A. Garrett, CCH 2001, pg. 2
Technology
Cons
-More complexity -Higher cost of integration - Less reliability - Accelerated pace of change - Rapid Obsolescence
Regulation
Relaxed barriers to entry Increased pricing flexibility Pro-entrant incentives Mandatory wholesale of unbundled elements
Unleashing Buying & Selling Power Use of electronic catalogs, self-service internet sales, Net marketplaces, etc. Use of e-sales and e-procurement tools has caused a revolution in the roles & responsibilities of: Sales managers/account executives Procurement managers/purchasing agents Contracts managers/contract administrators Fewer people with broader responsibilities requiring more education, training, and business skills to propose, negotiate, and administer complex
e-procurement: Managed by Exception Personalized views; named shopping carts Transactions automatically approved based on rules Order is sent through a supplier clearinghouse Immediate; based on shipment notice Continuous; integrated in real time; drives optimization of process
Developing an Integrated Supply Chain Integrated - means providing Enterprise Resource Planning (ERP) to ERP, core business transaction functionality to all participants Going beyond Supply Chain Management to the integration of databases between companies Today- large trade exchanges, built cooperatively by industry participants are changing the nature of business More companies are creating shared virtual workspaces, with appropriate security and access measures.
Exostars Mission:
To become the standard e-business platform for everyone in the Aerospace & Defense industry
Founding Members
BAE Systems Boeing Lockheed Martin Raytheon Rolls-Royce
Trading Partners
Large OEMs Government Buyers Airlines Tier 1 3 Suppliers Service Providers
EXOSTAR
Boeings Forum Pass Virtual Collaborative Workspace How Forum Pass Fits
Checkout/Check-in Via Forum Pass https Partner A
Contracts
https
PM
Contracts
ACCTG
https
https
Design MFG Virtual Mtgs. ACCTG PM
Partner B
Logos obtained from Boeing website
Example: Boeing ForumPass ForumPass offers a collaboration solution to address the challenges of integrated project teams Supports creation of dynamic, opportunistic project teams, independent of computing support Provides a common workspace that fosters innovation Breaks down barriers to collaboration
Process and schedule visibility Immediate notification of changes Visualization via Computer-Aided Design (CAD) Balances security with access to key collaboration partners
ForumPass Key Capabilities Project Management and Administration Document and Data Management Online Meetings Visualization and Mark-up Workflow Subscription-based notifications Security and access control
DO D
Boeing Project Management Document Management Product Data/Change Control Virtual Meetings Firewall Firewall Supplier C Firewall
Learning & Applying Best Practices & e-tools from Industry Leaders Bill Gates New Rules Microsoft Bill Gates New Rules for e-Business
1.Insist that communication flow through e-mail 2.Study sales data online to share insights easily 3.Shift knowledge workers into high level thinking 4.Use digital tools to create virtual teams 5.Convert every paper process to a digital process 6.Use digital tools to eliminate single-task jobs 7.Create digital feedback loop 8.Use digital systems to route customer complaints immediately 9.Use digital communication to redefine boundaries 10.Transform every business process into just-in-time delivery 11.Use digital delivery to eliminate middleman 12.Use digital tools to help customers solve problems for themselves Reference Text, pg. 7
Hormel Foods: Best Practices with Oracle Internet Procurement e-tool Case Study
Hormel Foods has recently completed the installation of Oracles Internet Procurement at all of its 50 locations. Employees at all of these sites are now able to create purchasing requisitions for non production items and have them automatically routed for approval, as well as track and access information on a real-time basis Self-guiding on-line catalogs allow workers to search for goods and services from approved suppliers Most of the savings associated with the implementation of Oracle Internet Procurement is as a result of Hormels procurement personnel no longer having to spend considerable amounts of time dealing with routine purchases
Lockheed Martin: Best Practices with SAP Business to Business (B2B) e-tool Case Study
In June 1999, the Missiles and Fire Control Division of Lockheed Martin located in Dallas, TX selected the Business to Business (B2B) Procurement system developed by SAP to replace an out-dated paper-based indirect procurement process. Lockheed Martin leveraged the capabilities of the SAP business workflow component to implement consistent business rules to ensure users purchases were appropriate, priced within limits, and ordered from approved suppliers. As a result of SAPs focus and rapid implementation, ease-of-use, and flexibility Lockheed Martin was able to control the use of their indirect procurement expenses achieving dramatic cost reductions.
Exercise 1 Building Successful Partnerships Divide into teams of 3 4 people Select one of the four common actions that winning companies are taking to build Successful Partnerships Conduct a 15 20 minute Brainstorming session, discussing and listing the advantages and disadvantages of the selected action and what actions you as executives should take to maximize success. Present your findings to the class (Be Brief 3 5 minutes)
Building Successful Partnerships in the e-Business Age Summary The power of e-Business has been unleashed by the advent of
new communication technologies and the the Need for Speed! However, to achieve high performance results, year over year, companies must form successful partnerships based upon trust Winning organizations are taking Four Common Actions to build Successful Partnerships: (1) Unleashing Corporate Buying & Selling Power (2) Changing Buying & Selling Processes (3) Developing an Integrated Supply Chain (4) Learning and Applying the Best Practices & e-tools from Industry Leaders
Ask
Align
Fulfill
Clarify Expectations
Control Expectations
Listen
Understand
Negotiate Compare Expectations to reality Resolve Gaps Communicate differences Re-set expectations Set realistic expectations Document acceptance criteria
Agree
Communicate Meet with customer Obtain agreement that expectations were met Identify gaps
Partnership Ingredients
Loyal Customer: A buyer who chooses to do business with a particular seller and commits to buy from that seller in the future. Satisfied Customer: A buyer who buys from a particular seller but expects to buy from others in the future.
Partnership Agreement(s)
Partnership Ingredients Complementary Strength Common Customer-base Customer Need/Desires = Business Partnership Chemistry
Contract Management What Is It? A process of planning, forming, and administering agreement(s) to buy or sell goods and services from or to another party The art and science of managing a contractual agreement(s) throughout the contracting process
Buyer
Contract
Seller
Contract
Subcontractor(s)
Contracts Definition An agreement between two or more (competent) parties or persons that creates an obligation to do or not do a particular thing A contract has two aspects: qDocument: Written manifestation of an agreement between parties qRelationship: The personal or professional commitment that forms the understanding between people who enter into agreements, either oral or written
Reference Text, pg. 19
Contracts Are
Sources of business: For sellers Sources of goods and services: For buyers Risk management tools: For both buyers and sellers Projects: That must be managed by people from both the buyers and sellers organizations.
Contract Managements Four Ps People qAuthority: Who can sign or approve? qResponsibilities: Who does what? Process: The means by which goods and services are exchanged Performance: How effectively the goods and services are bought and sold Price: What determines a reasonable price? How do terms and conditions affect price?
Phase 1: Preaward
2. Solicitation Planning 3. Solicitation
Seller
1. Presales Activity
Phase 2: Award
B uyer 4. Source Selection
Contract Award
Phase 3: Postaward
5. C ontract Administration 6. Contract Closeout or Termination
Seller
Contract
Award
5. C ontract Administration
*(Similar CM Process) Both follow a similar Contract Management process. *(Similar CM People Skills) Both require well-trained and educated people with broad skills sets (competencies including: Negotiation skills, financial skills, legal skills, interpersonal skills, communication skills, organizational skills, leadership skills, and others. *(Similar Performance Requirements) Both need to focus on delivering and/or providing quality products, services, and/or solutions for their customers faster, better, and cheaper.
An immense increase in knowledge workers and a decrease in manual workers. Contract Management professionals are knowledge workers. Individual effectiveness and collective growth required: Reasonable empowerment (Autonomy to act is essential). Opportunities to apply innovative judgment (strive to improve the deal). Continuous learning for growth (no other useful option). Biggest mistake of our time: treating knowledge workers as a cost rather than as an asset.
A Few More Points Demographics and work environments relate: In millions of cases, the knowledge worker is not dependent on a single employer for a career. The knowledge workers professional capabilities and skills are portable. The high likelihood exists for knowledge workers to pursue three or four successful growth jobs over a career. Many people will be crossing-over between either buyer or seller roles and/or government and commercial contracting sectors.
So Where Are We Headed? Recent research (1999 and 2000) by CMI* and ISM* relates for every 100 surveyed contracting/purchasing professionals concerning their roles: 90 indicate more time sensitive 85 indicate more responsibility 85 indicate more team-oriented 85 indicate more strategic 60 indicate less clerical Performance metrics are increasingly tied to strategic rather than transactional business measures
The Contract Management Institute (CMI) is the research arm of the National Contract Management Association (NCMA). The Institute of Supply Management (ISM) was formerly the National Association of Purchasing Management (NAPM).
Most Recent Research (2) (Contract Management Institute 2001) Which metrics are currently used by your organization to evaluate personnel?
Top 10 choices: 1. 2. 3. 4. 5. Responsiveness. 6. Human/interpersonal Integrity/ethical standards relations. Timeliness. 7. Process focus. Written communication. 8. Education. Oral communication. 9. Customer service (internal). 10. Accountability
Most Recent Research (3) (Contract Management Institute 2001) Which metrics will be used in the next 3 to 5 years?
Top 10 choices: 1. 2. 3. 4. 5. Business Judgment. 6. Integrity/ethical standards. Decision making 7. Education. Problem-solving ability 8. Human/interpersonal Negotiation skills. relations. Customer service (external). 9. Responsiveness 10. Communications
Most Recent Research (4) (Contract Management Institute 2001) Some bottom lines: The contract and purchasing management function is evolving toward a strategic business management focus. Performance evaluation metrics increasingly assess results not just activity. Employees are motivated to perform when they are measured about things they have control over. Performance evaluation systems should be pervasive
What is There About Contract Management That Makes it So Difficult? Requires a broad set of skills Business, legal, financial, interpersonal, leadership, team building, negotiation, multi-cultural Rare to find personnel with this broad capability Contract management is complex and is difficult to describe succinctly Makes it difficult to convey to others and install as a culture Personnel believe that it is just paperwork anyone can do it
What is There About Contract Management That Makes it So Difficult? (continued) Contract management appears overbearing to the uninitiated Falsely appears to stifle creativity Falsely appears to slow things down Falsely appears to be bureaucratic It is not uncommon for management to only give contract management lip service (Dont walk the talk) Lack of understanding = Lack of support
Business Conduct Issues What Executives Should Know & Do at the Outset
qCreate a clear vision, mission, and goals. qEstablish lines of authority whos in charge of what? qCreate lines of communication How to get work done! qFacilitate communication methods and structure Make sharing info easy! qSet expectations of each other Clarify roles and responsibilities to to ensure teamwork! qDevelop escalation processes When problems arise who do you contact! qEnsure employee feedback/performance evaluation process is regularly conducted qCreate a shared reward and recognition process qCreate and follow a Code of Conduct
Indicators of Poor Teamwork Communication stops Information is withheld A climate of suspicion and distrust exists Counterproductive subgroups and cliques form Fear-of-Failure causes individuals to avoid making decisions Complaining is prevalent Separateness and distrust prevail
Indicators of Good Teamwork Spontaneous, positive interpersonal interaction The collective energy level of the team is high A positive cooperative climate prevails Information flows freely between team members No work is considered beyond an individuals job description (If it needs to be done, someone is doing it) Complaining is almost non-existent The coffee pot is never left empty for other team members Separateness and distrust prevail
Executive Role in Establishing A Common Contract Management (CM) Vocabulary and Process
qUnderstand and use the correct CM terminology yourself. qDemonstrate your understanding of the CM process through your actions. qFund and support development of a glossary of common CM terminology, used in you industry, organization, and contracts. qProduce electronic copies and see to it that all Team members have the glossary of CM terms as a resource. qInsist that all team members faithfully use the approved CM process and terminology
Executive Oversight of Contract and Project Planning qEnsure that time and money to plan is provided for. qRequire an internal Contract Kick-off Meeting to review the plan. qReview the contract risks and how they will be managed. qEstablish Executive Management Milestones reviews. qDefine the business aspects you need to review and approve. qSet the schedule and measure performance against it.
Executive Oversight of Opportunity and Risk Management qEncourage everyone to identify potential opportunities and risks. qRequire that tailoring of procedures and templates be accompanied by risk assessment. qRequire and review opportunity and risk assessments throughout the contract management process. qRequire the planning and execution of approved risk mitigation and opportunity enhancement actions. qStay cognizant of the high risks and the progress toward mitigation.
Executive Commitment to Contract Changes Management qDefine the changes management process that must be used on all contracts. qBe an advocate of contract changes, as appropriate. qConstructively challenge informal contract changes at your initial reviews with team members. qConstructively challenge the effectiveness of the contract changes management at program reviews.
Executive Participation in Contract Visibility Management qEnsure that corporate information systems benefit the teams and provide Contract Managers with contract-level information necessary to manager their contracts. qShare as much company information as possible. qEliminate barriers to sharing information. qCreate a method for exchange of lessons learned between contracts and programs.
qEnsure your managers have the correct corporate and contract management vision. qKnow your managers and their leadership styles. Provide training or counseling to correct deficiencies.
Executive Support of Contract Corrective Action qPublicize expectations that contracts be technically compliant, completed on time, as as much under budget as possible. qRequire the use of Action Item Registers to drive corrective actions to closure.
Organizations that routinely execute contracts successfully usually have a well understood and practiced Contract Management culture backed by strong, knowledgeable, Executive Management Support.
2. Solicitation Planning
3. Solicitation
Seller
1. Presales Activity
Phase 2: Award
Buyer 4. Source Selection
Contract Award
Phase 3: Postaward
5. Contract Administration 6. Contract Closeout or Termination
Seller
Contract
Award
5. Contract Administration
1. Procurement planning
2. Solicitation planning
3. Solicitation
Procurement Planning Is the process of identifying which buyer needs can be best met by procuring products or services outside the organization Involves the buyers consideration of qWhether to procure (make-or-buy decision) qHow to procure (contracting method) qWhat to procure (products and services needed) qHow much to procure (quantity desired) qWhen to procure (delivery schedule)
Input Scope statement Product description Procurement resources Market conditions Other planning output Constraints Assumptions
Tools & Techniques Make-or-buy analysis Expert judgment Contract type selection Opportunity and Risk Management Process Contract terms and conditions
Reference Text
Solicitation Planning Involves preparing the documents needed to support the solicitation
Input Procurement management plan Statement of work Other procurement planning output
Solicitation
Involves obtaining information (bids and proposals) from perspective sellers on how project needs can be met Types of solicitations qRequest for proposals (RFP) qRequest for tenders (RFT) qRequest for quotations (RFQ) qInvitation for bids (IFB) qInvitation to bid (ITB) Types of information-only solicitations qRequest for information (RFI) qRequest for information and qualifications (RFI&Q)
Solicitation (continued)
Output
1. Presales activity
Presales Activity Is the process of early involvement with potential buyers, understanding and influencing their needs, plans, and expectations
Input Customer Identification Determination of customer needs Evaluation of competitors
Tools & Techniques Proactive sales management Market research Competitive analysis
Output Potential and existing customer lists Customer-focused sales plan Competitive analysis report
Bid/No-Bid Decision Making Is the process of evaluating risks vs. opportunities and making an informed and intelligent decision
Input Solicitation Buyer-specific information Competitive analysis report Sellers strategic objectives and plans
Tools & Techniques Opportunity and Risk Management process Opportunity and Risk Management (ORM) Model
Tools & Techniques Compliance matrix Standard terms and conditions Past proposals Lessons-learned database Executive summary
Observed
Extent of Application
Inconsistent Widespread Limited but growing Inconsistent Widespread Widespread Widespread Inconsistent
2. Solicitation Planning
3. Solicitation
Seller
1. Presales Activity
Phase 2: Award
Buyer 4. Source Selection
Contract Award
Phase 3: Postaward
5. Contract Administration 6. Contract Closeout or Termination
Seller
Contract
Award
5. Contract Administration
Buyers Step Source selection is the process of applying evaluation criteria to bids or proposals to select a supplier Price may or may not be the primary determinant Other criteria may be used: technical, past performance, quality, schedule, reputation, management, and so on A weighting system may be used to select a source or to rank all proposals to establish a negotiation sequence
This process may be simple to very complex May involve one person or a large team May use a screening system, establishing minimum requirements of performance
Tools & Techniques Contract negotiation Weighting system Screening system Independent estimates
Output
Contract
Source Selection Process Process of comparison and decision Informational prerequisites qKnowledge of required goods and services qKnowledge of industry qKnowledge of market practices Selection criteria elements qAttributes of interest qStandards qWeights
Sellers step The process of having your bid or proposal evaluated by the buyers, anticipating and responding to questions the buyer may have, negotiating, and forming a contract between the parties
Contract Management Process: Award Phase Contract Negotiation and Formation (continued)
Input Solicitation Bid or proposal Buyers source selection process Sellers past performance Previous contracts Competitive analysis report
Tools & Techniques Contract negotiation process Highly skilled negotiators Market and industry practices Legal review
Successful negotiators must Have the ability to perceive and comprehend factors shaping and characterizing the negotiation Exhibit behavioral and analytical skills to diagnose problems and adapt winning strategies Understand their own personalities and personal ethics and values Know their products and services, desired terms and conditions, and pricing strategy
Personal: Family and friends Professional: qInternal Organization qExternal: Buyers and subcontractors Question: How well do you negotiate?
Negotiation Approaches Intuitive approach qNonstructured qInformal not written qInconsistent results Process approach qStructured, planned qDocumented actions qMore consistent results
What Is Different About Global and Domestic Negotiations? Political and legal issues International monetary factors Foreign governments and their bureaucracies Potential instability and sudden change Cultural diversity Export/Import regulations
Preparation and planning Effective planning Negotiation skills Effective follow-up documentation
Getting to Yes Means Getting past no Getting around yes, but qFocusing on common interests not positions qUse of joint problem solving Internally Externally qThe right solution is a matter of perspective buyer or seller
Acquire necessary supplies and services of the desired quality, on time, and at the lowest reasonable price Establish and administer a pricing arrangement that results in payment of a fair and reasonable price Satisfy needs of the end user (customer)
Profitability (long-term vs. short-term) Market share Satisfy needs of the customer
Phase 1: P renegotiation Phase 2: C onducting P hase 3: P ostnegotiation ontract C Planning N egotiations A ctions A ward
1. P repare yours elf and your team 2. K now the other party 3. K now the big picture 4. Identify objectives 5. P rioritze objec tives 6. Create options 7. S elect fair s tandards 8. E x am ine alternatives 9. S elect y our s trategy, tac tic s, and countertactic s 10. Develop a solid and approved team negotiation plan 1. Determ ine who has authority 2. P repare the facilities 3. Us e an agenda 4. Introduce the team 5. S et the right tone 6. E x change inform ation 7. Focus on objec tives 8. Us e s trategy, tac tics, and countertac tic s 9. M ake counteroffers 1. P repare negotiation m inutes 2. S end m intues ot the other party 3. O ffer to write up the contrac t 4. P repare the contract 5. P repare negotiation results s um m ary 6. O btain required reviews and approvals using CM S 7. S end c ontract to the other party for signature
10. Docum ent agreem ent or know 8. P rovide copies of the contract when to walk away to affected organizations 9. Doc um ent lessons learned 10. P repare contract adm inistration plan
Type of contract
Price
Services
Miscellaneous Products
Ts and Cs
Obligations
Warranties
Spares
Taxes
Exchange rate
Guarantees
Countertactics
Disclose the attack Strike back Give in Break off Explore alternatives
Tricks
Escalate
Arbitrary deadlines
Countertactics
Agree with deadline Counter the offer with compromise schedule Refuse to change schedule
Limited availability
Coordinate schedules in advance Counter with your limited availability Be flexible Escalate
Third-party scapegoat
Real approval required Pretend such approval is required
Countertactics
Giveaways
Tactics
Countertactics
Tactics
Delays
Countertactics
Diversions
Take a break
Tactics
Stonewall
Countertactics
Give in
Say Yes, and... Walk away Escalate Settle in next quarter or next year
Factors in Selecting Contract Types Capability of sellers accounting system Uncertainty in the cost estimate Type and complexity of the requirements Urgency of the requirement Marketplace and competition Sellers technical capability Administrative costs to both parties Size and amount of the contract
Observed
Extent of Application Inconsistent Inconsistent Inconsistent Inconsistent Limited Limited Limited Widespread Inconsistent Widespread Inconsistent
Include incentives for early payments Ensure all incentives have limits
Understanding How Negotiations Work For about 15 years of my life, I watched negotiators I was trying to learn from and finally come to the realization that they did not know what they were doing. If something went wrong and I asked, Well, why did it go wrong? they could not tell me. If I asked, What did you do right? they could not tell me. The insight I got was that no one knew. You can assemble a group of great people who have taken part in great negotiations for a discussion, and they all come up with completely different reasons for why the negotiation was successful and how it worked. - GERARD I. NIERENBERG
Contract Award Phase Best Practices (Contract Negotiation & Formation) (Buyer & Seller)
Best Practices Select and train skilled negotiators to lead the contract negotiation process Select your negotiation strategy, tactics, and countertactics Use an agenda during contract negotiations Do not be too predictable in your tactics Develop an approved negotiation plan
Adapted from Reference Text, pg. 155
Observed
Extent of Application Inconsistent Inconsistent Widespread Inconsistent Widespread Widespread Widespread Inconsistent Widespread Widespread Inconsistent
Conduct mock negotiations Document your agreements throughout the process Understand everything affects price Tailor Ts & Cs to the deal Know what is negotiable and what is not Know when to walk away
2. Solicitation Planning
3. Solicitation
Seller
1. Presales Activity
Phase 2: Award
Buyer 4. Source Selection
Contract Award
Phase 3: Postaward
5. Contract Administration 6. Contract Closeout or Termination
Seller
Contract
Award
5. Contract Administration
Contract Administration
The principal objective of contract administration for both the buyer and the seller is to ensure fulfillment of contractual obligations by all parties to the contract.
Tools & Techniques Contract analysis and planning Preperformance conference Performance measuring and reporting. Payment system Change control system Dispute management system
Compliance with terms and conditions Effective internal and external communication and control Effective control of contract changes Effective resolution of claims and disputes
Reasons for Noncompliance The six great excuses I never saw the contract. I didnt have a chance to read the contract. I didnt understand the contract. I thought the contract was wrong. Thats not what the contract says! What contract?
Need for Communication Between Buyers and Sellers Contracts are relationships Relationships are not cast in concrete-they change with circumstances Contractual relationships are dynamic Communication is essential for effective responses to change Sharing information is necessary, but not sufficient?
Main Tasks for Buyers and Sellers Analyze obligations, assign responsibilities, and set performance goals Observe, document decisions and events, and report performance Identify and analyze variances Take corrective action Follow up Manage changes and disputes Close out contract
Contract Analysis
Read all terms and conditions Separate into technical and administrative requirements Develop contract work breakdown structure to at least three levels Identify who is responsible for work elements
1 .1 T e c h n ic a l r e q u ir e m e n t s
1 .2 A d m in is t r a t iv e r e q u ir e m e n t s
1 .1 .1 S p e c if i c a t io n s 1 .1 .2 W o rk
1 .2 .1 P a y m e n t p ro c e d u re s 1 .2 .2 C h a n g e m a n a g e m 1 .2 .3 D is p u t e s
s ta te m e n t
1 .1 .3 S c h e d u le
e n t
Setting Goals Discuss requirements with affected managers Determine qWho qWhat qWhen qWhere qHow Seek agreement and/or commitment
Preperformance Conference Meeting between buyer and seller Held before start of performance Review contract terms and conditions Establish administrative procedures Establish communication protocols Keep and distribute meeting minutes
Records and Files for Buyers and Sellers Official copy of contract and modifications Conformed working copy of contract Correspondence file, log or index, and suspenses Telephone log Records of deliveries, inspections, acceptances Progress and surveillance reports Property administration records Invoice and payment records
Progress Reports May be oral or written Include observations and conclusions of others Present information that is not real time Afford opportunities for errors: Accuracy Objectivity Honesty Timeliness Competence of observer
Report Considerations Subject Matter Contents qRaw data qAnalyses qConclusions qCombination of above Frequency and timing Format Address(es)
Records and Documentation Main purpose: Reduce reliance on human memory Efforts must be thorough and consistent Essential for qProof of performance qManagement of changes qProof of claims qEvidence in case of arbitration or litigation
Contract
Change Management Actions Changes modify contract requirements, terms, and conditions They add, delete, or both They affect the triple constraints: qPerformance qSchedule qCost
Change Management Actions (continued) Modifications are inevitable Change provides an opportunity for additional sales Management objectives include qControl qCustomer Satisfaction qCost recovery qSchedule adjustment qProfit
Change Authorization
Ensure that only authorized representatives make, accept, or negotiate contract changes Add the appointed representatives to the contract Change orders in writing, when possible Confirm oral changes in writing
Notification of Changes
Notify other party of actions or inactions that are changes, such as constructive change Notify promptly, in writing Provide full description and explanation
Control of Claims and Disputes Contract agreements are not perfect Misunderstandings are inevitable Claims and disputes qAre a normal part of contracting process qMust not be allowed to disrupt performance qMust be resolved promptly and dispassionately
Resolution of Disputes Negotiation, compromise Arbitration qSubmission of dispute to disinterested person or persons for final decision qObjective is final disposition in inexpensive, expeditious, and less formal manner qA substitute for litigation Litigation
Buyers and sellers steps Contract closeout involves both product verification and administrative closeout
Input Completion of work Contract documentation or Termination notice
Tools & Techniques Compliance verification Contract documentation Contract closeout checklist Termination
Output Product or service completion Acceptance and final payment Contract closeout or termination documents Documented lessons learned
N/A
No
Types of Terminations
Termination by mutual agreement Termination for cause or default Termination for convenience (most widely used in government contracting)
Exercise 5: The Postaward Phase Q & A 1.What is the purpose of contract administration? 2. 3. 4.What are the main tasks of contract administration? 5. 6. 7.How important is change management to the success of your business?
Exercise 5: The Postaward Phase Q & A 4.How should contract disputes be resolved between the buyer and the seller? 5. 6. 7.How important is it to enforce the terms and conditions of your contracts? 8. 9. 10.How important is it to document and share lessons learned and best practices?
Contributory and knowledgeable team members throughout the contract management process. Innovative thinkers for strategic decision making, business alternatives, and partnering. Useful knowledge of multiple markets and the use of market research. Strong internal and external communication and facilitation skills. Proven skill in using computer-based programs and e-business media. Staying connected through an organizations digital nervous system. Customer-service attitude and results. Concern for quality whatever the assignment. Continuous learning through professional certification.
How would you be evaluated today given these metrics?