I'm just trying to understand your position.
Considering that you are managing all contractual relationship with another company (buy and sell side) sounds actually good from your company perspective. It would mean, that your leadership can expect you to have a full overview about the contractually back and forth with this JF. Therefore I assume it's hard to change the mind of your leadership, since I would expect them to see your doublerole as positive.
However on the other side, there is your personal position, meaning being something in the middle of a sandwich, right? I'm not sure about your empowerment, but in worst case you have also very limited authority to change some company rules (discounts, penalties, payment conditions, acceptance criteria etc.). And on buy side you usually have different contractual expectation than on sell side. I assume, this is the tricky part in your situation. Fulfilling the internal requirements for buy- and sell side with the same contractual partner at the same time (and maybe also your partner asks you if you are a bit crazy, since requesting sooo different contracts when you are either on sell side or on buy side).
When the conditions your company expect in contracts are very different on sell side and buy side, this should be communicated as an issue (to your leadership). I think there are 2 options as solution: either the requested second CM as you suggest, or an escalation to the leadership to align clear buy and sell conditions between your company and the JF, which are equal to both parties. such framework conditions would make at least your position more clear. And maybe there won't be anymore need of a split of the CM roles buy side and sell side?
Since I couldn't find many information in your post, I hope, this is somehow helpful?
If your uncomfortable position has other reasons, please let me know.
• Omaha Public Power District
I probably would start collecting facts: Firstly, establish the relationship between Your Company ("Y Company") and Company X ("X Company") by looking at any specific, written agreement about the services ("X and Y Services"). Also, establish clarity around (1) Y Company's services to be provided to X Company, and (2) X Company's services to be provided to Y Company. At this point, are there any conflicts that you can see/anticipate in your ability as the Contract Manager during the provision of X and Y Services, that perhaps could result in non-performance or non-compliance? Also, how do you escalate and cure any issues of non-performance (for example)? Secondly, I would review the files documenting any legal review, if any, prior to said agreement being reviewed for signature/execution. Were there any concerns that were raised and eventually resolved (internally)? AT the very least, you could start with the resource allocation -- that is, regarding your time management and how to better allocate your skills - in developing your case. Hope this helps. Regards ~ Rose
Its an interesting role and I recommend your decision to bring in another manager to take one of the contracts.
I would recommend to present this as two different roles:
On the buy side - Contract Manager would play role of a customer and to manage Company X, need to drive and establish Vendor Management Discipline around Contract Administration / Governance / Service Performance / Financial Management / Risk and Compliance
On the sell side - Contract Manager would play role of an engagement partner to drive business relationship / Value addition to Company X/ increase revenue generation from Company X to your company / Joint go-to-market strategy if possible.
Public Works Advisory, NSW Department...
I´d strongly encourage you to raise this question also within the IACCM technology network, which is a micro-community, where you will be able to get insights to new trends in this specific field and where I am sure you´ll have the opportunity to share ideas regarding the topic you have brought:
Also, please check our library: www.iaccm.com/resources/ where, you will find some articles about 'escrow agreements' for the software arena and other topics associated with risk management in the hardware world as well. By analogy you will explore ideas regarding hardware coming from best practices and escrow programs with the goal of risk mitigation
Hi Michelle - saw your post. For hardware: having a refresh plan with your supplier following a bit of a mutual benchmark, to see how best to provision for your upcoming capacity needs, might give some assurance. For services or subscriptions-based tech: having a documented 'cookbook' of key players and tech needed to recreate the service, including a list of any solutions 'not commercially available' or not easily re-purchased in Canada updated, might also be helpful to gage the difficulty of transitioning off your current tech,if needs be.
Those two governance-type processes, along with the typical supplier obligation to reasonably cooperate with any successor and to provide some mutually-agreed orderly termination assistance, might serve you well (outside escrow for software). Hope that offers some ideas...good luck. Cheers, Robin
Agree - this was quite an insightful article. I've always believed that it should work in reverse - that you should set the objective and then leave it up to individuals to work out how to get there, which is what the article says except for specifying that their roles need to be clear. I believed that if roles were less clearly defined then it gave people scope to expand their remit, however I can see why this can cause confusion.
Just in case you still need a few other pointers, consider the following:
One thing sales people understand is numbers so approach it from an accounting point of view. Since the contract is void, consider discussing the fact they will not be able to meet all the GAAP principles for revenue recognition and if your accounts folk are diligent they probably will back you up ( but run this by them - accounts - first. Companies interpret or apply GAAP revenue recognition differently ).
Since Company X no longer exists and as such has no contracting capacity, it cant assign/novate the contract which will impact collectability should the New Company choose not to follow through with what it has implied it would do re: payment
If you are required to create a new agreement using the same or similar terms and conditions, consider preparing a risk assessment analysis of the contract and let the stakeholders approve the risk they are taking on by utilizing the same Ts & Cs so everyone is on the same page. Whatever discussions or approvals were obtained for the former Company should not apply to the New Company.
the SLA should have the basic things like resolution time/ Response time, Escalation Matrix,support timimg periods,
Did you manage to obtain a Contract Change Form and Process? I have one which we use for an IT Outsource Contract and could send through to you if you can provide your email address.
Aveva's ProCon solution contains a Post-Award module which supports the contract execution process from the contract award stage, through processes such as general correspondence, management of change, management of payment, and dispute resolution, to management of closeout. To your point, you need to protect yourself from contract variations and scope changes with the ability to manage these effectively and have a clear path to understand these and approve as necessary. ProCon can help with these vital challenges. Feel free to contact me for more information.
I cannot suggest any template, but can advise the following points to be taken care of while agreeing the Contract -
1) Overstay compensation or rate revision formula
2) Discount factor for scope increment or compensation factor for reduction.
3) % of Liquidated damages, in case of delay attributed to Contractor's end.
4) Try to negotiate with some grace period even after original contract completion date keeping the original rates valid.
Having co-led the introduction of Relational Contracting into the Australian Department of Defence, where it is known as Collaborative Contracting, since mid 2013 with the help of IACCM I wanted to add my thoughts on your question. For the record we were lucky enough to have Jim Bergman help us on our journey!
In terms of 'Does Relational Contracting require long term commitment over multiple contracts for the parties to realize the benefits?'. Simply put, no it does not. A single contract can absolutely benefit from a relational approach, especially where there is a high level of uncertainty about main elements of the contract such as scope, performance, schedule and of course price. A relational approach allows both parties to work together collaboratively to evolve the solution, noting it could be a novel solution that has not been used before. For example, in the Australian Department of Defence we have a number of contracts where we are either the largest user in the world or the first user, which necessitates a degree of flexibility in the commercial structure since the uncertainty and risk is high. Both parties have to work in good faith to deliver the enterprise outcome to Defence. The relational contracting approach provides a commercial architecture within the contract to allow both buyer and seller to have these discussions without reverting to tightly fought commercial structures.
That said, I do believe that in large organisations such as the Australian Department of Defence, there should be levels of a relational contracting approach. For example, at the contract level, even for multi-party contracts, we'll use a Collaborative Contracting approach. However, when we combine multiple contracts with a single seller, we can then combine these relationships as a part of a Supplier Relationship Management (SRM) approach to vendor management across a program or portfolio of contracts. Again, Jim assisted us with this, although we are still on the SRM journey.
In terms of 'How do we ensure that the benefits (price competitiveness, quality of service, innovation etc.) that can also accrue from competitive sourcing are not lost?'. The Australian Department of Defence has been using Performance Based Contracts (PBCs) since 2005 to ensure both short-term and long-term benefits are being realised. In 2012 we started using what we refer to as Generation 3 PBCs which includes enterprise performance and enterprise behaviours (relational) within the performance measurement framework linked to both commercial consequences, both positive and negative. In this case, we typically use incentives such as contact extensions, sometimes known as rolling wave or award term contracts, to ensure the seller is maintaining the long-term behaviours you described. You can get more information on these type of performance based contracts at my blog at www.performancebasedcontracting.com.
Finally, to assist with the successful implementation of Collaborative Contracting into our commercial functions we developed and released on 28 September 2018 a Collaborative Contracting Better Practice Guide a copy of which you can get from the following link www.defence.gov.au/casg/Multimedia/Collaborative_Contracting_Better_Practice_Guide-9-8860.pdf.
Anyway, I hope this helps. And of course, as part of the IACCM Australia New Zealand Advisory board and an IACCM Fellow I would be happy to answer any further questions.