Contract Management -...

Contract Management

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TABLE OF CONTENTS

Preface .............................................................................................................................................. 7

What is Courseware? ................................................................................................................................ 7

How Do I Customize My Course? .............................................................................................................. 7

Materials Required ................................................................................................................................... 8

Maximizing Your Training Power .............................................................................................................. 9

Icebreakers ...................................................................................................................................... 10

Icebreaker: Friends Indeed ...................................................................................................................... 11

Instructor Guide Sample ................................................................................................................... 12

Module Two: Defining Contract Management .................................................................................. 13

What is Contract Management? ............................................................................................................ 14

Contract Types ........................................................................................................................................ 15

Contract Elements................................................................................................................................... 16

Risks of Poor Contract Management ...................................................................................................... 17

Module Two: Review Questions .............................................................................................................. 19

Activities ......................................................................................................................................... 22

Sample Worksheet: Offers ...................................................................................................................... 23

Quick Reference Sheets .................................................................................................................... 24

Contract Types ........................................................................................................................................ 25



Certificate of Completion ................................................................................................................. 26

PowerPoint Sample ............................................................................................................................ 1

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Preface

What is Courseware?

Welcome to Corporate Training Materials, a completely new training

experience!

Our courseware packages offer you top-quality training materials that

are customizable, user-friendly, educational, and fun. We provide your

materials, materials for the student, PowerPoint slides, and a take-

home reference sheet for the student. You simply need to prepare and

train!

Best of all, our courseware packages are created in Microsoft Office and can be opened using any

version of Word and PowerPoint. (Most other word processing and presentation programs support

these formats, too.) This means that you can customize the content, add your logo, change the color

scheme, and easily print and e-mail training materials.

How Do I Customize My Course?

Customizing your course is easy. To edit text, just click and type as you would with any document. This is

particularly convenient if you want to add customized statistics for your region, special examples for

your participants’ industry, or additional information. You can, of course, also use all of your word

processor’s other features, including text formatting and editing tools (such as cutting and pasting).

To remove modules, simply select the text and press Delete on your keyboard. Then, navigate to the

Table of Contents, right-click, and click Update Field. You may see a dialog box; if so, click “Update entire

table” and press OK.

(You will also want to perform this step if you add modules or move them around.)

If you want to change the way text looks, you can format any piece of text any way you want. However,

to make it easy, we have used styles so that you can update all the text at once.

If you are using Word 97 to 2003, start by clicking the Format menu followed by Styles and Formatting.

In Word 2007 and 2010 under the Home tab, right-click on your chosen style and click Modify. That will

then produce the Modify Style options window where you can set your preferred style options.

For example, if we wanted to change our Heading 1 style, used for Module Titles, this is what we would

do:

Now, we can change our formatting and it will apply to all the headings in the document.

For more information on making Word work for you, please refer to Word 2007 or 2010 Essentials by

Corporate Training Materials.

Materials Required

All of our courses use flip chart paper and markers extensively. (If you prefer, you can use a whiteboard

or chalkboard instead.)

We recommend that each participant have a copy of the Training Manual, and that you review each

module before training to ensure you have any special materials required. Worksheets and handouts are

included within a separate activities folder and can be reproduced and used where indicated. If you

would like to save paper, these worksheets are easily transferrable to a flip chart paper format, instead

of having individual worksheets.

We recommend these additional materials for all workshops:

Laptop with projector, for PowerPoint slides

Quick Reference Sheets for students to take home

Timer or watch (separate from your laptop)

Masking tape

Blank paper

Maximizing Your Training Power

We have just one more thing for you before you get started. Our company is built for trainers, by

trainers, so we thought we would share some of our tips with you, to help you create an engaging,

unforgettable experience for your participants.

Make it customized. By tailoring each course to your participants, you will find that your results

will increase a thousand-fold.

o Use examples, case studies, and stories that are relevant to the group.

o Identify whether your participants are strangers or whether they work together. Tailor

your approach appropriately.

o Different people learn in different ways, so use different types of activities to balance it

all out. (For example, some people learn by reading, while others learn by talking about

it, while still others need a hands-on approach. For more information, we suggest

Experiential Learning by David Kolb.)

Make it fun and interactive. Most people do not enjoy sitting and listening to someone else talk

for hours at a time. Make use of the tips in this book and your own experience to keep your

participants engaged. Mix up the activities to include individual work, small group work, large

group discussions, and mini-lectures.

Make it relevant. Participants are much more receptive to learning if they understand why they

are learning it and how they can apply it in their daily lives. Most importantly, they want to

know how it will benefit them and make their lives easier. Take every opportunity to tie what

you are teaching back to real life.

Keep an open mind. Many trainers find that they learn something each time they teach a

workshop. If you go into a training session with that attitude, you will find that there can be an

amazing two-way flow of information between the trainer and trainees. Enjoy it, learn from it,

and make the most of it in your workshops.

And now, time for the training!

Icebreakers

Each course is provided with a wide range of interactive Icebreakers. The trainer can utilize an

Icebreaker to help facilitate the beginning of the course, as it helps “break the ice” with the

participants. If the participants are new to each other, an icebreaker is a great way to introduce

everyone to each other. If the participants all know each other it can still help loosen up the

room and begin the training session on positive note. Below you will see one of the icebreakers

that can be utilized from the Icebreakers folder.

Icebreaker: Friends Indeed

Purpose

Have the participants moving around and help to make introductions to each other.

Materials Required

Name card for each person

Markers

Preparation

Have participants fill out their name card. Then, ask participants to stand in a circle, shoulder to

shoulder. They should place their name card at their feet. Then they can take a step back. You

as the facilitator should take the place in the center of the circle.

Activity

Explain that there is one less place than people in the group, as you are in the middle and will

be participating. You will call out a statement that applies to you, and anyone to whom that

statement applies must find another place in the circle.

Examples:

Friends who have cats at home

Friends who are wearing blue

Friends who don’t like ice cream

The odd person out must stand in the center and make a statement.

The rules:

You cannot move immediately to your left or right, or back to your place.

Let’s be adults: no kicking, punching, body-checking, etc.

Play a few rounds until everyone has had a chance to move around.

Instructor Guide Sample

On the following pages is a sample module from our Instructor Guide. It provides the instructor

with a copy of the material and a Lesson Plans box.

The key benefit for the trainer is the Lesson Plan box. It provides a standardized set of tools to

assist the instructor train that particular lesson. The Lesson Plan box gives an estimated time to

complete the lesson, any materials that are needed for the lesson, recommended activities, and

additional points to assist in delivering the lessons such as Stories to Share and Delivery Tips.

Module Two: Defining Contract Management

Every business relationship relies on contracts. Contracts are made

with vendors, employees, customers, partnerships, etc. These

agreements must be managed carefully, which is where contract

management comes into the picture. In order to effectively

implement contract management, however, it is necessary to

under stand what it entails.

Thoroughly read all your

contracts. I mean thoroughly.

Bret Michaels

What is Contract Management?

Contract management is not just contract administration. Rather than simply

drawing up the contracts, the manager works to ensure that the entire process runs

smoothly. The contract manager is involved in not just the planning and

development but also the execution of the contract, and beyond to the point of

renewal. Typical contract management activities include:

Contract creation

Negotiation

Assessment

Relationship management

Contract amendment

Audits

Renewal

Over the course of this instruction, you will develop a better understanding of these roles.

Estimated Time 7 minutes

Topic Objective Review the definition of contract management.

Topic Summary What is Contract Management?

Discuss the different aspects of contract management.

Materials Required Flipchart/board, marker

Planning Checklist None

Recommended Activity

Discuss the characteristics of contract management. Consider the different

activities that apply to contract management. Write some of their answers

on the board/flipchart.

Stories to Share Share any personal, relevant stories.

Delivery Tips Encourage everyone to participate.

Review Questions What is not contract management?

Contract Types

All contracts are legal documents that establish the right and responsibilities of the

parties involved. Contracts can be created for almost any situation. There are four

basic contract types, and they are chosen based on the factors and data available.

While the list is not exhaustive, it is a good starting point. These common contracts

are:

Fixed Price Contracts: The price of the item or service is usually fixed and will not change, which

benefits the buyer. Variations of this contract include firm fixed price, fixed price with

adjustment, fixed price with incentive, fixed price with downward price protection, and fixed

price with redetermination.

Cost Reimbursement Contracts: These contracts benefit the seller. The buyer agrees to pay a

price, free, or partial fee. Common types of contracts include cost-sharing and cost without fee.

Letter Contracts: These contracts allow the suppliers or vendors to take action before the

details of the agreement are finalized. The buyer is at risk if liability limits are not clear.

Partially Defined Contracts: Created when one or more aspects, such as goods, services, and

deliveries, are not known ahead of time. These include value contracts, quantity contracts, and

time and material contracts.


Topic Objective Review the types of contracts.

Topic Summary Contract Types

Discuss the different types of contracts.


Planning Checklist Bring in examples of each type of contract, and pass them out to the class.

Recommended Activity Consider the pros and cons of each type of contract, and list them on the

flipchart/board.



Review Questions What are the four common contracts?

Contract Elements

Commission- Every contract is unique, but there are three basic elements most

contracts need to be considered legal and binding. These elements are the

offer, acceptance, and consideration.

Offer: The offer is the promise of goods or services in exchange for agreed upon rates or

exchanges. An offer is different than a negotiation because an offer is binding once accepted.

Acceptance: The offer is accepted based words or actions required by the individual making the

offer. A counter offer occurs when the offer is not accepted, but new conditions are proposed.

Consideration: This happens when the exchange is made based on the accepted offer. Payment

is an example of consideration.

These definitions are not all-encompassing, and there are exceptions to every rule. The legal

department should always be consulted when creating a new contract. Still, these elements are useful

starting points for all contracts.


Topic Objective Review the basic contract elements.

Topic Summary Contract Elements

Discuss the basic contract elements.

Materials Required 01: Offers


Recommended Activity Complete the worksheet individually. Share your answers with the rest of

the class.



Review Questions What are the three basic contract elements?

Risks of Poor Contract Management

Poor contract management is not just weak negotiation; it can occur at any step

of the contract cycle. It also costs business relationships, delays projects, causes

litigation, and damages the bottom line. Common problems identified by the

International Association for Contract & Commercial Management include:

Contracts lack full scope

Agreement disputes

Pricing arguments

Subcontractor issues

Effective contract management will address the contract process from its creation through the renewal

or end. Preparation and ongoing management of contract relationships are essential to the success of

any business.


Topic Objective Review the effects of poor contract management.

Topic Summary Risks of Poor Management

Discuss the effects of poor contract management.



Recommended Activity

Discuss poor contract management experiences as a group. List some

situations on the flipchart/board and consider actions that could prevent

them as a group.



Review Questions What organization monitors contracts?

Case Study

Cameron is looking for vendors for his retail space, and Daniel seems to be a

good fit with his company. Daniel met with Cameron, and they discuss the

ideas. Daniel informed Cameron that he wanted 900 square feet of space and

signs a contract. Cameron, however, only provided 750 square feet of space in

the building. The contract is not clearly worded, and Daniel demands an

increase in area. Cameron already promised the space to someone else, but he is not sure what his

options are. He considers releasing Daniel from the contract to prevent any problems


Topic Objective Outline the Defining Contract Management case study.

Topic Summary Case Study

Discuss the characteristics of contract management.

Materials Required None


Recommended Activity Discuss the outcome of the case study. What could Cameron have done

differently?



Review Questions What type of space does Cameron have?

Module Two: Review Questions

1. What is Not involved in contract management?

a) Advertising.

b) Negotiation.

c) Relationship management.

d) Assessment.

Contract management involves the entire contract process, which includes contract creation

negotiation, assessment, relationship management, contract amendment, audits, renewal. A

contract manager does not directly oversee advertising.

2. At what point in the contract cycle does contract management stop?

a) Assessment.

b) End.

c) Audit.

d) Negotiation.

Contract management oversees the entire contract cycle. The end of the contract relationship is

when contract management ends. If the contract is renewed, the process begins again.

3. What is a cost sharing contract?

a) Fixed price.

b) Cost reimbursement.

c) Letter.

d) Partially defined.

Cost sharing contracts are cost reimbursement contracts. In these contracts, the buyer agrees to

pay a price, free, or partial fee, and they typically benefit the seller.

4. What type of contract is used when there are unknown elements?

a) Fixed price.

b) Cost reimbursement.

c) Letter.

d) Partially defined.

Partially defined contracts are used when there are unknown elements. Examples of these

contracts include value contracts, quantity contracts, and time and material contracts.

5. What is true once an offer is accepted?

a) There are 30 days to change it.

b) The negotiations begin.

c) Cannot be changed.

d) Counter offer.

Offers may be changed by the offeror before they are accepted. An offer is binding, however,

once it is accepted.

6. What is an example of a consideration?

a) Payment.

b) Negotiation.

c) Counter offer.

d) Communication.

When the exchange is made based on an offer that has been accepted, it is a consideration.

Payment for goods and services is an example of consideration.

7. Besides preparation, what will prevent poor contract management?

a) Subcontracting.

b) Ongoing management.

c) Over commitment.

d) Nothing.

Effective contract management will address the contract process from its creation through the

renewal or end. Preparation and ongoing management of contract relationships are essential to

the success of any business.

8. What is NOT associated with poor contract management?

a) Over commitment.

b) Communication.

c) Pricing arguments.

d) Subcontractor problems.

Proper communication will benefit contract management. Common issues with contract

management are Over commitment, Contracts lack full scope, Agreement disputes, Pricing

arguments, and Subcontractor issues.

9. How many square feet of space did Daniel want?

a) 750.

b) 675.

c) 900.

d) 950.

Daniel requested 900 square feet of retail space. Cameron only provided 750 square feet of

space in the end.

10. What space did the contract define?

a) 750 sq./ft.

b) None.

c) 900 sq./ft.

d) 250 sq./ft.

Daniel requested 900 sq./ft. and Cameron only gave him 750. The contract was not specific

about the size of the space, creating a dispute between Cameron and Daniel.

Activities

During the facilitation of a lesson Worksheet or Handout may be utilized to help present the

material. If a lesson calls for a Worksheet or Handout it will be listed in the Lesson Plan box

under Materials Required. The trainer can then utilize the Activities folder for the

corresponding material and then provide it to the participants. They are all on separate Word

documents, and are easily edited and customized.

Below you will see the Worksheets or Handouts that are utilized during the training of the

above lesson. They are located in the Activities folder and can be easily printed and edited for

the participants.

Sample Worksheet: Offers

Use the spaces below to quickly write a brief offer. It does not have to relate to work and can be about

anything.

_____________________________________________________________________________________

_____________________________________________________________________________________

_____________________________________________________________________________________

_____________________________________________________________________________________

After the class discussion, refine your offer below.

_____________________________________________________________________________________

_____________________________________________________________________________________

_____________________________________________________________________________________

_____________________________________________________________________________________

Quick Reference Sheets

Below is an example of our Quick reference Sheets. They are used to provide the participants

with a quick way to reference the material after the course has been completed. They can be

customized by the trainer to provide the material deemed the most important. They are a way

the participants can look back and reference the material at a later date.

They are also very useful as a take-away from the workshop when branded. When a participant

leaves with a Quick Reference Sheet it provides a great way to promote future business.

Contract Types

All contracts are legal documents that

establish the right and responsibilities

of the parties involved. Contracts can

be created for almost any situation,

and will ideally involve legal. There are

four basic contract types, and they are

chosen based on the factors and data

available. While the list is not

exhaustive, it is a good starting point.

What is Contract Management?

Contract management is not just contract administration. Rather

than simply drawing up the contracts, the manager works to ensure

that the entire process runs smoothly. The contract manager is

involved in not just the planning and development but also the

execution of the contract, and beyond to the point of renewal.

Typical contract management activities include:

Contract creation

Negotiation

Assessment

Relationship management

Contract amendment

Audits

Renewal

Over the course of this instruction, you will develop a better

understanding of these roles.

Risks of Poor Contract Management

Poor contract management is not just weak negotiation; it can occur at any step of the contract cycle. It also costs

business relationships, delays projects, causes litigation, and damages the bottom line. Common problems identified

by the International Association for Contract & Commercial Management include:

Over commitment

Contracts lack full scope

Agreement disputes

Pricing arguments

Subcontractor issues

www.corporatetrainingmaterials.com © Corporate Training Materials

Contract Management

http://www.corporatetrainingmaterials.com/

Certificate of Completion

Every course comes with a Certificate of Completion where the participants can be recognized

for completing the course. It provides a record of their attendance and to be recognized for

their participation in the workshop.

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PowerPoint Sample

Below you will find the PowerPoint sample. The slides are based on and created from the Instructor Guide. PowerPoint slides are a great tool to use during the facilitation of the material; they help to focus on the important points of information presented during the training.

Full Table Of Contents

Preface ..............................................................................................................................................7

What is Courseware? .........................................................................................................................7

How Do I Customize My Course? .............................................................................................................. 7

Materials Required ................................................................................................................................... 9

Maximizing Your Training Power .............................................................................................................. 9

Module One: Getting Started ........................................................................................................... 11

Housekeeping Items ................................................................................................................................ 11

The Parking Lot ....................................................................................................................................... 12

Workshop Objectives .............................................................................................................................. 12

Module Two: Defining Contract Management .................................................................................. 13


Contract Types ........................................................................................................................................ 14

Contract Elements ................................................................................................................................... 15


Case Study ............................................................................................................................................... 17

Module Two: Review Questions .............................................................................................................. 19

Module Three: Legal and Ethical Contract Management .................................................................... 22

Contract Law I ......................................................................................................................................... 22

Contract Law II ........................................................................................................................................ 24

Defining Ethical Contract Management ................................................................................................. 25

Ethical Breaches ...................................................................................................................................... 26

Case Study ............................................................................................................................................... 27

Module Three: Review Questions ........................................................................................................... 28

Module Four: Contract Management Requests ................................................................................. 31

Choosing Potential Bidders ..................................................................................................................... 31

RFPs and Technology .............................................................................................................................. 32

Calculating Value .................................................................................................................................... 33

Making a Choice ..................................................................................................................................... 35

Case Study ............................................................................................................................................... 36

Module Four: Review Questions ............................................................................................................. 37

Module Five: How to Create a Contract ............................................................................................ 40

Templates and Software ......................................................................................................................... 40

Compliance ............................................................................................................................................. 41

Wording .................................................................................................................................................. 42

Risks of Noncompliance .......................................................................................................................... 43

Case Study ............................................................................................................................................... 44

Module Five: Review Questions .............................................................................................................. 45

Module Six: Contract Negotiations ................................................................................................... 48

Be Prepared ............................................................................................................................................ 48

Prioritize Terms ....................................................................................................................................... 49

Remain Professional ............................................................................................................................... 50

Execute the Contract ............................................................................................................................... 51

Case Study ............................................................................................................................................... 52

Module Six: Review Questions ................................................................................................................ 53

Module Seven: Assess Performance ................................................................................................. 56

What Performance Can Be Assessed ...................................................................................................... 56

Creating Metrics ..................................................................................................................................... 57

Measuring Performance ......................................................................................................................... 58

Improving Performance .......................................................................................................................... 59

Case Study ............................................................................................................................................... 60

Module Seven: Review Questions ........................................................................................................... 62

Module Eight: Relationships ............................................................................................................. 65

Qualities of Effective Relationships......................................................................................................... 65

Relationship Pitfalls ................................................................................................................................ 66

Building Trust .......................................................................................................................................... 67

Maintaining Relationships ...................................................................................................................... 68

Case Study ............................................................................................................................................... 69

Module Eight: Review Questions ............................................................................................................ 71

Module Nine: Amending Contracts ................................................................................................... 74

Redlines and Strikeouts ........................................................................................................................... 74

Replacing Clauses ................................................................................................................................... 75

Describing Amendments ......................................................................................................................... 76

Amendment Status ................................................................................................................................. 77

Case Study ............................................................................................................................................... 78

Module Nine: Review Questions ............................................................................................................. 79

Module Ten: Conducting Audits........................................................................................................ 82

Why Audit? ............................................................................................................................................. 82

Plan ......................................................................................................................................................... 83

Establishing Procedures .......................................................................................................................... 84

Investigate and Report ........................................................................................................................... 85

Case Study ............................................................................................................................................... 86

Module Ten: Review Questions............................................................................................................... 87

Module Eleven: Renewing Contracts ................................................................................................ 90

Involve Stakeholders ............................................................................................................................... 90

Review ..................................................................................................................................................... 91

Check for Accuracy and Changes ............................................................................................................ 92

Update or Cancel .................................................................................................................................... 93

Case Study ............................................................................................................................................... 94

Module Eleven: Review Questions .......................................................................................................... 95

Module Twelve: Wrapping Up .......................................................................................................... 98

Words from the Wise 98

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