Advanced Contracts & Purchasing Management

Introduction

Sourcing contracts can consist of anything from a brief document with a price list attached, to hundreds of pages of legal documentation, terms, schedules, and flow charts.

This program explores key concepts forming the basis of strategic procurement and moves though leading edge issues that confront the purchasing organization today. Initiating and managing contracts can be a complex process that requires a thorough understanding of specific planning and procurement activities. Successful sourcing relationships are based on careful and detailed preparation before the contract is signed. Both parties need a clear understanding of the type of relationship desired. Therefore, contract management is a systematic process in the procurement of services and products that involves specific phases and associated activities, including: planning and purchasing, award and implementation.Choosing the right Contract Strategy is the primary factor in determining contractor performance. It defines the way work will be allocated among contractors, the type of contractors to use, form of contracts (e.g.., lump sum or reimbursable cost), the allocation of risks, and how benefits or incentives will be used. Contract strategies are unique and must reflect cost and savings objectives, the level of scope definition, prevailing market conditions, technology involved, people to be managed, location, specialized skills and services required, and the allocation of responsibilities between owner/proprietor and contractor.

Objectives

After participating in our advanced, dynamic and interesting contract management training course, you will be able to:-

• Gained an advanced knowledge on contract management and apply its proven techniques, tools and procedures on planning, strategy, development, legal, negotiation, disputes, claims, counter claims, risk and administration
• Review the meaning of strategic procurement
• Understand methods of focusing on the more important areas of procurement
• Selected the most appropriate contract strategy
• Be taught how to develop spend analysis
• Designed the contract to mitigate the risk of disputes and design a dispute resolution system
• Selected the most suitable contractor and establish the responsibility matrix
• Explained the effect of various organizational roles and their impact on the management and execution of the contract
• Improve their understanding of various types of contracts and the suitability of each one to the particular requirements of the client and contractor
• Create, maintain and enhance effective working relationships through consideration of more collaborative working, joint venture, partnering and alliances
• Apply the contracting policies applicable, and operational aspects in the industrial and commercial environment
• Improve the understanding of contract risk and the development of effective contingency arrangements
• Obtain an awareness of the legal implications of the contracting process and apply an appropriate remedy for disputes resolution and minimization of conflict
• Apply Total Cost of Ownership (TCO) and Cost, Time, Quality (CTQ) principles to your advantage.

Training Methodology

This is an interactive course. There will be open question and answer sessions, regular group exercises and activities, videos, case studies, and presentations on best practice. Participants will have the opportunity to share with the facilitator and other participants on what works well and not so well for them, as well as work on issues from their own organizations. The online course is conducted online using MS-Teams/ClickMeeting.

Who Should Attend?

This intensive program is suitable for:

• Contract Managers/Contract Analysts
• Facilities Managers
• Procurement Managers
• Sales and Marketing Managers
• Service/Operation Managers
• Consultants
• Financial Officers
• Portfolio and Commercial Managers
• Engineering/Maintenance Managers

Course Outline

Day 1 – The Steps to Strategic Procurement

• Developing Spend Analysis
• Excel Tools For Analysis
• Category Management
• Developing Key Performance Indicators (KPI) For Procurement 

The Demand for Continuous Improvement in Total Cost of Ownership

• Driving Down Prices Through Cost/Price Analysis
• Determining And Tracking Cost Drivers
• Cost Containment
• Improving the Purchasing of Maintenance, Repair, Operating (MRO)

Understanding the contract

• Overview of the tendering and contract award process
• Understanding contracts – a refresher on legal requirements for a contract
• Formal and Informal Contractual documents, including
  • Standard terms and conditions
  • Letters of intent
  • Letters of comfort
• The specification and scope of work – linkage to price and payment
• Types of contracts
• Recognizing where the contract risks lie
• Planning for Contract Life Cycles

Day 2 - Key skills of contract management

• The role and value of an effective contract manager
• Implementing the new contract
• Effective Review processes
• Inspection and certification of contractual performance
• Managing suppliers of professional services
• Working with contract management reports
• Using KPIs in effective contract management

Proactive Contract Risk Management

• What do we mean by risk?
• Risk vs. uncertainty
• Attitudes towards risk
• Risk identification, factors and sources
• Risk analysis approaches
• Qualification and quantification of probability and impact
• Dealing with subjective elements of risk
• Risk strategies

Day 3 - Model Contracts and Terms

• Selecting the right model for the contract
• Force Majeure clauses
• Indemnities and Insurance clauses
• Warranty clauses
• Bonds and Guarantees
• Contract variation clauses
• Economic Price Adjustments
• Terms & Conditions for Adjustments
• Price adjustments using price indexes

Effective Handling of Contract Performance Issues

• Work Ordering Process
• Contract Administration
• Reporting Mechanisms
• Cost Control
• Quality Assurance and Control
• Recovery Clauses

Day 4 - Managing Price and Contract Variations

• Managing Price escalation
• Getting a breakdown of costs
• Cost and price analysis techniques
• Tracking changes
• Managing variations to the work
  • Changes to timing, accelerating delivery
  • Increase or decrease in scope
  • Changes to work methods
• Negotiation techniques for price and contract variation management
• Case study

Day 5 - Managing claims and disputes

• Typical contract claims – scope, delay, quality, payment
• Implementing penalties or service credits
• Liquidated and unliquidated damages
• Termination and other methods of dealing with default
• Defects Liability Management
• Dispute Resolution – tools and techniques to use
• Contract closeout
• Case study

Resolving disputes

• Negotiation
  • Stage processes
  • The need for compromise
  • Negotiation techniques
• Litigation
• Arbitration
• Alternative Dispute Resolution
  • Expert determination
  • Early neutral evaluation
  • Mini-Arbitration
  • Mediation
  • Pendulum Arbitration
  • Dispute Review Board and similar arrangements