Contract managers usually get to focus themselves on overseeing the business contracts and facilitating to every negotiation, record keeping and recommendation that a business has to undergo. They see to it that they keep everything in place so that the contract management will not be having a hard time dealing with various processes. Managing daily activities will be also easier using a contract management plan. This is beneficial for contract managers as it will be both practical and useful. In this article, you will be able to know about what a contract management plan is and how to make an effective one.
A contract management plan (CMP) is a type of document that provides details about how to manage a contract effectively involving performance measures, delivery dates and other delivery details, etc. This ensures that ever individual is aware of what needs to be done, who will be doing it, how will it be implemented and when will it be implemented.
The essential elements of a CMP includes the following:
– agreed partnership approach
– delivery management service
– agreement administration
– challenges and tasks
– contract management plan
– roles and responsibilities of contracting agency
– compiled documents from the contracting agency
– outputs, performance level and objective information requirements
– roles and responsibilities
– dates of activities
– cost bearing agreement
– results arrangement
– dates and service releases
– change mechanisms especially in law, bidding, control, etc.
– resolving disputes
– contingency arrangements
– rights of contracting agency
– contingency plans for emergencies
– framework for independent auditing
– public consultation needs
this stage provides the rules of the contract.
this stage refers to the contract award and construction commencement
this refers to the use of the contracted services provided
In drafting a CMP, you have to identify first your key activities that you may want to focus using a Value Risk Matrix (VMP). This VMP contains the four components: routine, leveraged, focused, and strategic.
Routine means low value contract and low risk which is usually transactional. Leveraged means high value contract and low risk which concentrates on the process of how to extract a value from a contract. Focused means low value contract and high risk which concentrates on the risk management. Strategic means high value contract and high risk which requires a detailed CMP and a contract manager.
After determining the focus of your CMP, adapt the CMP to make it suitable for the given value profile of the contract. You also have to involve your supplier in drafting you CMP. The supplier has the responsibility of focusing on the developmental plan that basically works for the benefit of your organization and the supplier also.
The contract must be able to monitor the performances where payments are made. These must be based on the objectives and supported by a quantitative data.
It can some issues about the services, new facilities, rights to raise issue, delays to the construction program, construction defects, property issues, staff issues and more.
This may include the operation itself, monitoring of the contracted services or the transfer of contract.
Creating a contract management plan is crucial in ever business especially those that are in the filed on construction and other companies that seek to develop an effective strategy. Always keep in mind the necessary details that should contain in a contract management plan. You may also try to see more templates by looking at other contract management plan templates.