Professional Documents
Culture Documents
CONTRACT MANAGEMENT
CONTRACT
A contract exist when an offer is made and accepted It may take different forms such as:
A written document A digital document A fax A verbal agreement
CONTRACT..Cont
The basis for all event management documentation It is the goals and objectives of the event frozen in time Each contract specify who will do what, when it will be done and for whom it will be done It can be detailed or as simple as letter of agreement or purchase order (PO)
TYPES OF CONTRACTS
COST-PLUS CONTRACTS FIXED-PRICE CONTRACTS INCENTIVE CONTRACTS MIXED CONTRACTS
FIXED-PRICE CONTRACT
Also known as lump-sum contract One price is determined for the whole resource It allows the supplier and contractor the freedom to use its own subcontractors to produce deliverable It transfer the risk of variation in cost to the supplier The good and services have to be carefully described and the manager need to know the market price of the goods and services Examples ????
INCENTIVE CONTRACT
A percentage share of profit is common for entrepreneurial events or corporate-sponsors events that have an admission price The entertainment supplier might get percentage of the door Incentives can be included in the cost-plus or the fixed price contract If certain cost or schedule targets are met, then the contractor or supplier gains an extra fee Examples???
MIXED CONTRACT
It is a mixture of all three type described A venue could be a contracted for a fixed fee plus cost with a percentage of profits It is advisable to secure the services in the case of unique contracts. Examples ????
NEGOTIATION
BACKGROUND PRECEDENT
Preparation Background info on supplier and their styles business Powerful argument Reducing or increasing fees is far more difficult once a precedent has been set Attitude of the parties Seen a win/win situation or a mutual benefits to all parties
PARTNERING
ADMINISTRATION
Setting the procedures for contract review with task and responsibilities Briefing all the contractors
Maintaining a general firm but fair attitude about fulfilling the contract terms
CONTRACT VARIATIONS
EXTERNAL AND UNKNOWN (e.g.: natural disasters, exchange rates, new legislation)
INTERNAL AND KNOWN (e.g.: new suppliers coming on board, increase in staff)
COMMON PROBLEMS
Too much time spent on negotiation Lack of sufficient knowledge regarding the event element Lack of contract knowledge Not realizing the implication of a variation in the contract Settling for a cost plus contract Not requiring the suppliers to make timely progress reports Not realizing that both bidding and administration are cost to the event Not settling disputes Not obtaining a signed release form at the time of any dispute settlement Not asking questions Not getting any changes
END OF CHAPTER 8
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