Contract management

in procurement
Prepared by MABHEKA SIMBARASHE
(C17130468M) BACHELOR OF (SCIENCE
HONS) IN SUPPLY CHAIN
MANAGEMENT, LEVEL 2;2 @ CUT.
2018/10/14
 Contract management
in procurement
Objective of this presentation:
Grasp what is contract and contract
management, distinct areas of
contract management ,importance of
managing a contract,essential
elements of successful contract,
contract management process ,roles
of the parties , conflict resolution
strategies .
 Contract management
What is contract
Is a legal binding
agreement between
two parties with the
valid offer and
acceptance.
 Contract management
● By undestanding the definition of contract it
become easy to know what is contract
management
● Contract management is defined as the
proccess of managing contact creation ,
execution and analysis to maximize
operational and financial perfomance of an
organization, all by reducing financial risks.
 Importance of managing a
contract
● Minimize risk
● Improved control and quality of service
provision
● Mantainance of high qaulity suplier
relationship
● Ability to develop innovative proposals by
working closely with suppliers
Distinct areas of contract
● Contract administration
● Service
● Relatoinship management
 Contract administration
● Management of the
physical contract
and the adherence
to the sections and
aims of the contract.
 Service
● Ensures that the supplier meets the
services perfomance and quality that is
required.
 Relationship management
● There must be a
mutually constructive
relationship between
the vendor and the
buying organization.
● There must also
problem free.
 ESSENTIAL ELEMENTS OF
SUCCESSFUL CONTRACT
● Organizational benafits and financial returns are
realised
● No conflicts affect the contract
● Suppliers cooperate to the need of buying organization
● Service delivered as required by the buying
organization
● Company’s objective are met
● Collaboration relationship
contract management process
● Initial request
● Authorizing contract
● Negotiate
● Approving
● Execution
● obligatory
● Revision and ammendments
● Auditing and reporting
● renewal
 roles of the buying
organization in a contract
Buying organization:
● Supervize
● Negotiate
● Payment
● buyer’s interest
● Planning
● Manage risk
● Avoid disputes
 Role of the supplier in a
contract
● Negotiate
● To be paid
● Delivery of service
● Planning
● Promotion
● Advising or educating the buyer on how to
use the product or service
conflict resolution strategies
● Accomodation
● Negotiation
● Compromise
● Collaboration
● Avoiding
others:
● Abitration
● Mediaton
● litigation
 references
● Lectures notes from MUKAYANI C
● WFP: Goods and Services Procurement
● UN/OHRM: Procurement and Contract
Management Participant Guide, 2003
● NIGP- Davison W.D. and Wright E.: Contract
Administration, LEAP Textbook, 2004
● ITCILO/SIGMA-Westring G. and Jadoun G.:
Public Procurement Manual, 1996