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Contract Management

The management of contracts for major programmes of works, whether in outsourcing, technology, organisational change, shared services or PFI can be a challenge. Most procurement and legal departments do have contract management specialists. However, the nature of internal departments is such that they often have conflicting priorities, heavy workloads and are under increasing time pressures across a wide range of disciplines.

Added to this already extensive burden on your procurement and legal departments is the necessity to keep abreast of changes in legislation and current applicable case law. Keeping up to date in these areas assists you to ensure any day to day decisions that are made by the project managers on the programme do not adversely impact or undermine any contractual management activities that are in place. If these are undermined, you could find yourself on the wrong end of very expensive change control requests on projects.

Where contracts are for straightforward purchase and supply agreements, these can be much simpler to manage. However, where contract management is necessary for complex programmes of work, such as outsourcing, organisational change, shared services and technology – the management process can be significantly greater – and exposes you to much greater risk.

With complex programmes, it is not unusual that the purchasing organisation needs to rely on the expertise of the service delivery partner. The procurement process, project management and contract management processes need to be handled with care so that you are able to rely on the advice of your partner.

Service delivery partners who represent themselves as having ‘specialised’ expertise have much greater responsibilities to the purchasing organisation than many organisations realise. This is good in that your partner is obligated to provide you with the right advice and to act with a duty of care and a duty to warn you of anything that might adversely impact the service delivery. If they don’t it becomes the partner’s responsibility to remedy the problem at its own cost, rather than the cost of the purchasing organisation.

It is concerning that most project and contract managers are not aware of the specialised responsibilities and inadvertently remove those responsibilities from their service delivery partner by their day to day actions in managing the contract/programme.

Adoption of our ACCELERATE methodology helps align contract management for complex programmes so that front line project managers do not inadvertently undermine the contract management process. In this way, misunderstandings over expectations and unanticipated chargeable change control are avoided thus providing certainty of scope and costs over the lifetime of the programme.

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