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What are the Best Strategies for Contract Management?

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  • Written By: Terry Masters
  • Edited By: Allegra J. Lingo
  • Last Modified Date: 15 November 2016
  • Copyright Protected:
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    Conjecture Corporation
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Contract management is a hectic process that requires attention to detail and the ability to process information from various parts of a project to ensure that contract requirements are met. Some of the best strategies employed by successful contract managers can be summarized as systematize, track, appraise, and recognize (STAR). Using some of the strategies that fall under these categories will streamline administration and help a contract manager avoid the most obvious pitfalls.

Managers should systematize the administration of the contract. Either create a unique system using a custom database for handling details or buy a commercial software package for contract management. All relevant paperwork should be filed both electronically and in hard copy. Find a comfortable way to connect contacts and correspondence to the appropriate contract. The goal is to make create a repeatable process for contract administration which can be used in various circumstance and by different people.

Milestones, deliverables and costs should be tracked with specificity. These three categories are the crux of contract management. Milestones should be noted as events on a calendar with alerts to help keep them in mind. Deliverables should be defined and monitored using a reporting system that gathers information from the employees working on the project and synthesizes it into written proof that the deliverable was met. Costs should be tracked and conformed to the project budget as frequently as possible.

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Making in-person appraisals of the status of the project as it relates to the contract is also important. Establishing close relationships with the project manager and the most important employees assigned to the contract may make them more included to be truthful about the status of the work. Site visits should also be made to provide a method of confirming the status of the project. Professional and consistent communication with all stakeholders on the project, particularly upper management and client contacts, will help ensure that everyone has a clear understanding of project status. It is usually helpful to create a project update or newsletter that is circulated on a regular basis.

All projects have the capacity to go off the rails, and the key is to recognize it before it happens. With a good contract management system in place, red flags will begin to appear concerning milestones, deliverables, and costs. If relationships with line staff are strong, rumblings about problems on the ground will trickle up. Any concerns should be worked into the regular communication stream, and management should be informed. All contracts have a procedure for addressing unforeseen circumstances, and contract modifications requests should be made before a crisis occurs.

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jacobsmiths
Post 1

Though the contract management system can be hectic, it is very worth it. I know several companies who have benefited greatly from this system. This article is a great explanation of contract management. Well done.

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