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You should consider the cost of the contract,you should not compromise quality and you should keep to the timing of the contract.
Contract management, sometimes referred to as contract administration, refers to the processes and procedures that companies may implement in order to manage the negotiation, execution, performance, modification and termination of contracts with various parties including customers, vendors, distributors, contractors.
contract negotiations have two distinct stages: negotiation of the basic business terms followed by negotiation of the legal terms.
In a typical contract negotiation, each party compromises on some issues in order to get what it really wants. Although there are always lots of details to work out, most contract negotiations boil down to two essential factors: risks and revenues.
Under contract law, there is no contract until all of the material elements of the deal have been negotiated and agreed upon. So, a legal dispute over whether and when a contract exists will boil down to whether any of the outstanding legal issues are material elements of the deal.
One key to the outcome of contract negotiation is the relative bargaining positions of the parties. A party with vastly superior bargaining power -- for example, a landlord operating during a housing shortage or an employer that is hiring during a recession -- doesn't have to negotiate. Instead, these heavy hitters often present a contract and tell the weaker party to "take it or leave it." In cases of contracts of adhesion -- form contracts that can't be negotiated -- this can sometimes backfire, because the less-advantaged party may later argue that a provision is unfair or unconscionable.
If you are in the superior bargaining position, it is not always in your best interest to dictate all of the terms.
According to the Project Management Institute's PMBOK, Risk management is one of the ten knowledge areas in which a project manager must be competent. Project risk is defined by PMI as, "an uncertain event or condition that, if it occurs, has a positive or negative effect on a project's objectives." When you're young, risk seems like an interesting topic. It sounds like something you might encounter on a snowboard or in a race car. By the time you've grown up and become a professional project manager, it's equally fascinating. Project risk management is a project management activity that involves identifying, assessing, measuring, documenting, communicating, avoiding, mitigating, transferring, accepting, controlling and managing risk. The process of identifying risks is intuitive for experienced project managers. The following types of risks (risk categories) should be enough to stimulate your creativity.
1. Executive Support Wavering, inconsistent or weak executive commitment is often a project's biggest risk. This can be difficult (but not impossible) to document. Ask for specific commitments. Where you are denied you can document it as a risk.
2. Scope The quality of your estimates, dependencies and scope management. If an estimate is just a guess, that's a risk. Be sensitive to the comfort level of estimates. If your team is unsure about a particular estimate, you can document this as a risk.
3. Change Management A continuous flow of complex change requests can escalate the complexity of your project and throw it off course. Change requests may lead to a perception that a project has failed because they continually add budget and time to the project. If requirements are missing items that are expected to come later, that's a risk.
4. Stakeholders Stakeholders with a negative attitude towards a project may intentionally throw up roadblocks every step of the way. If you anticipate conflict or a lack of cooperation between stakeholders, document it as a risk.
5. Resources & Team Resource issues such as turnover and learning curves are common project risks. There's always a risk that your key experts will leave. If your team are inexperienced or need to acquire new skills, that's another risk.
6. Design The feasibility and flexibility of architecture and design are key to your project's success. Low quality design is a risk. You might want to highlight the design of complex or experimental components as separate risks.
7. Technical The risk that components of your technology stack will be low quality. There are dozens of quality factors for technical components (e.g. stability, availability, scalability, usability, security, extensibility). It's a good idea to identify specific risks in components. For example, the risk that a component will have a security flaw.
8. Integration Whatever you're delivering needs to integrate with the processes, systems, organizations, culture and knowledge of the environment. Integration risks are common. If you need to integrate your project into a business process there's a risk that the process will be disrupted. This may represent a significant business impact. In 1999, a ERP implementation at Hershey's disrupted manufacturing and distribution operations. The company was unable to process $100 million in orders. Quarterly profits dropped 19 percent.
9. Communication Invalid stakeholder expectations is a fundamental project risk. If the stakeholders think you're building an orange but you're building an apple — your project will fail. If stakeholders become disengaged (e.g. ignore project communications), that's a risk.
10. Requirements Garbage in, garbage out. If requirements aren't feasible or are detached from business realities, your project may fail. Look at the feasibility, quality and completeness of requirements to identify risks. Look at whether requirements are possible to integrate with organizations, processes and systems.
11. Decision Quality Slow, low quality or ambiguous decisions are common risks.
12. Feasibility Risk identification is a critical time to consider the feasibility of the project. Ask the key members of your team to do their own sanity checks. List any doubts about feasibility as risks.
13. Procurement The procurement process is ripe with risks. For example, there's a risk that you won't find an acceptable proposal to an RFP. There's also a risk that your vendors won't deliver to the terms of their contracts.
14. Quality Quality and risk management are intertwined. You'll expect to have defects in your project. However, there's a risk that quality won't meet basic levels. Significant rework may trigger project failure. Identify quality related risks for process inputs and outputs. Identify quality risks for infrastructure, work packages, components and products.
15. Authority Project teams often lack authority to complete project work. In many cases, teams are expected to influence to achieve project objectives. This reflects business realities. For example, your project may cross organizational boundaries. It's rare that a project team doesn't depend upon influence. It's a useful exercise to think of risks in terms of a lack of authority. If you need to influence to secure infrastructure. cooperation or inputs — there's always a chance the answer will be no.
16. Approvals & Red Tape If you anticipate that red tape (e.g. financial approvals) will slow down your project — add this as a risk.
17. Organizational Organizational change (e.g. restructuring, mergers, acquisitions) will throw your project off track. Think about the minimum stability that your products require to launch. List potential organizational changes as risks.
18. External External forces such as laws, regulations and markets. If your project touches compliance-sensitive processes regulatory change is a risk.
19. Project Management If your organization asks you to streamline your project management methodology (drop processes and documentation) you can document this as a risk.
20. Secondary Risks Secondary risks are often overlooked aspect of risk. Secondary risks are the result of risk mitigation and transfers. Let's say you transfer a risk to a vendor with a fixed price contract. The contract itself represents a counterparty risk. You've replaced a series of project execution risks with a series of procurement risks.
21. User Acceptance There's always a chance that users will reject your product. You can build a product that matches requirements (on time and to budget). However, if users reject the product the project will be considered a failure.
22. Commercial If you're building a commercial product for market (new product development), there's always a chance the product will be a commercial failure. This should be documented as a project risk. (Anna Marr)
Contracts (both internal and external) are the best vehicle avaiLable for us to manage most of the listed risks
Contract management negotiation, sometimes referred to as contract administration, refers to the processes and procedures that companies may implement in order to manage the negotiation, execution, performance, modification and termination of contracts with various parties including customers, vendors, distributors, contractors and employees. While businesspeople often dismiss contract preparation as “lawyer’s work” that has little or nothing to do with the important aspects of the working relationship between the contractual parties, contracting is actually one of the crucial activities in determining the success of any business arrangement.
1.We assume that one of your roles as in-house counsel will be assisting your internal clients with contract preparations and it is absolutely essential that you work closely with your clients to establish well in advance your mutual expectations regarding the role that you will be expected to play in the negotiation, drafting, finalization and monitoring of a particular contract. In most cases, you should expect to be responsible for drafting the contract and all related documents as well as spotting and resolving specific legal issues.
2.For each proposed contractual arrangement you should get in the habit of going through a checklist of the actions that you might be expect to take in order to assist the company. You’ll eventually develop your own checklist that you can refer to as time goes by.
3Make sure that you begin with a thorough investigation of both the business and legal background for the contract and the proposed transaction and business relationship in which the contract is to be used. Appropriate representatives of the company should be interviewed to determine how the relationship has evolved and what, if any, commitments may have already been made by the parties. This is also the time to give special consideration to the actual and potential impact on the company’s existing obligations and business relationships. for Effective Contract Management”.
4.Working with the appropriate representatives of the company, you should identify the steps that need to be taken in order to comply with the requirements of any contract review and signature authority policies and procedures that have been established by the company. For example, does the contract need to be reviewed and approved by senior management and/or the board of directors and, if so, what needs to be done in order to expedite review and consideration.
5.Once you have a good understanding the scope of the proposed business relationship you should identify the contracts and related documents required to document the relationship and complete any immediate transaction and then proceed with collecting and reviewing examples of the necessary contracts to expedite the drafting process and isolate specific questions that the company will need to answer in order for the contract to be complete and accurate.
6.If warranted by the complexity of the proposed transaction, you should prepare a time and responsibility schedule for drafting, review, discussion, revision and completion of all required items and activities. For example, a time and responsibility schedule is often useful for a financing transaction that must pass through several stages over an extended period of time including preparation of a business plan, presentations to potential capital providers, preparation of financing documents and satisfaction of closing conditions.
7.Taking into account discussions with company representatives regarding your role, you should participate in the negotiation of the essential terms of each contract and, if appropriate and useful, prepare a term sheet or letter of understanding to be sure that the parties are in agreement regarding the essential terms before time and effort is spent on contract preparation. If you are not to be directly involved in negotiations you should, at a minimum, provide company representatives with a list of questions that will need to be answered in order for the contracts to be completed so that the representatives can discuss them with their counterparts from the opposite party.
9.Once the documentation is finalized you should prepare for the closing of the transaction, including pre-closing meetings and preparation of closing checklists and memoranda. If certificates and/or consents from outside parties are required in order for the contracts to be finalized and become effective they must be planned for well in advance and may themselves require time-consuming negotiations.
10.Once the closing is completed you should make sure that all of the closing documents are organized and that copies are delivered to all interested parties. This is also the time for you to make sure that the files relating to the transaction that have been opened during the process described above are organized so that they can be easily accessed in the future should questions arise.
The most important thing is the full knowledge of the country in which the contract occurs to include the political and security changes in the contract to preserve the right of all parties in the event of any problem in this country
Clear scope of work, clear obligations and clear termination conditions
Those are two different things where in contract management you need to keep an eye on all the clauses of the contract and follow that with a grid or a plan to see what has been achieved.
In Negotiations on a contract you need to understand what your requirements are and focus on getting that and more by putting together a plan to achieve so.
Some of the Key areas as an organisation you should see the below 3 areas
1) Warranty & Recall Clause - As in todays scenario for any defect the companies are going out and recalling the defected products. to protect the OEM from this expense. Recall clause should be agreed well with the supplier.
2) Limited Liability: How much coverage the supplier will take in case the supplier has to pay to the OEM.
3) IPR Clause : Define clearly what is yours and what belong to the supplier.
My interpretation of the question is this;
Contract management is a function undertaken during performance or in my area specialisation (infrastructure) delivery of goods and services. It is all emcompassing requiring good knowledge of legal, commercial and administrative aspects of the contract.
When there is a problem with my contracts I simply:
Invariably these investigations relate to claims or variations the entitlement for will be subject to the findings in points 1 and 2 above. In negotiations in relation to these matters I usually start with NO, and allow them to convince me otherwise.
Thanks
I support my colleagues answers
CommunicationMutual InterestsIndiviual Interests
