• Contract Manager Canada Inc.
If the project is delayed by the Employer... first make sure that there were no delay causes by the Contractor on the previous agreed milestones, for you to be fully eligible for a compensation. Now the tricky part to kick in, is the delay resulting to only warranty extension, which means that all construction, installation and pre-commissioning done? Just ensure that you've all signed-off documents that it's pre-commissioned. if so, your service team will provide an additional cost for extra-warranty coverage and you can lever it as a scope-creep. This is not an issue, if all of your works are completed and no more to come back to do additional works, then you need to add remob to commissioning cost plus the extended warranty cost and get a CO prior to agreement of extension. Don't forget to have your insurance company informed on this extension, as they were notified of previous warranty commitment, not the new one. Hope this serves.
• Seiersen Enterprises
It strikes me that the actual costs of extending the warrantee might be considered.
These may be nil if the delay in the project delays the in service date, and thus the risk of fault.
The onus might be put on the supplier to prove the materiality of additional warrantee costs whatever they might be.
• Capgemini India
As warranty effort is provisioned to fix bugs of contractor's defects, since the delay is caused by the Employer, the Contractor is entitiled to claim additional cost. Not only is this instance 'due to failure of the employer (customer)', which is not due to cause by the contractor, there could also be a delay in the service start date, which means the plans for service could be impacted. Therefore, I believe the additional cost is justified.
Our service department has actually been able to provide a number for us by unit of what an additional year of warranty costs us. Do you know how much the first year costs you? You could always just submit that as an estimate for year two.
Ultra Electronics Precision Control S...
It´s a pleasure to share the information with you and the colleagues of the forum.
So, in Brazil many companies has been implanting CM in their structures but still have many doubts about this area. Sometimes managers asking me about the difference about contract management and project management.
Nowaday I work for a steel company in Brazil and has been implanting with a team a contract management area to help the company to reach their strategic results.
Rio de Janeiro - Brazil
• New Zealand Defence Industry Association (NZDIA)
Public sector all over the globe. IT and Infrastructure. When mining and Oil and gas pick up would expect more there.
In Australia there is a lot of interest in CM to assist with commercial excellence endeavours.
we are as well facing smth similar within our company, especially what concerns the Contract management tools and systems. Being a contract manager myself I have been a part of the team that is quarterly checking that deals selected by some criteria are properly stored in the tool. Almost all the time they were not. But since we have implemented the now tool it turned out that a sales team can not proceed further with delivery/execution process unless the contract is properly stored in CLM. So this tool is kind of a trigger - if a contract is there, then assignment can be created. And... for such upload - the responsible person is exactly the contract manager/contract administrator, i.e. the person who owns the contract and knows what to upload. Since that time all contracts are there. Sometimes such methods works as well and need to be applied.
I suggest you:
a) define and write up the purpose or importance of timely inputs (for all inputs being overlooked), and
b) measure and summarise the error rates and input times
c) prepare risk assessment and cost benefit analysis/ estimate (hard$ savings unachievable/ consequential time lost/ risk "contingency cost" vs input time) based on a and b.
d) survey all users to identify their excuses/ issues with the system/ lack of awareness/skills
e) summarise above in a report to exec management. Seek system fixes, user training, compliance enforcement and resources to implement these things.
f) If you don't get support from exec, then focus only on the worst problems that you are capable of fixing.
• ABB Contracting Co Ltd.
We also experienced the similar situation and I believe this is somehow natural and common when the control, involvement of higher management and objectives of the people involved are not aligned. Sometime the pressure and the load of the work are also the reasons contributing to such a behavior. What we did was the following:
Conducted training sessions highlighting the importance of the issue and tis consequences for the organization
Top down message highlighting the importance and adherence of the process
regular check up of data and accountability
the outcome was good however it took some time and efforts are still on going
i had an over view about all the replies and they are all valid points - if we have a fresh beginning lets say its an advantage so you able to implement the rules rather than change rules - there many points to be addressed as below :
a. Contract administration.
b. relationship and process between different parties during pre and post tender award.
c. risk management and mitigation process.
d. periodical meeting for tender and project review.
e. contract management process and implementing it into a way to be effective and part of both tendering and project process.
... after all i would like to add its very important that top management within your organization to support that - and does not consider it as only consultancy or optional process.
Have you considered an e-learning module that would increase internal skills and awareness of what improved contract management can achieve? E-learning tends to be very low cost and learners can complete it at times that suit them.
• A+E Project Services
You must list the gaps between your existing processes and what you want to be. These gaps needs to be controlled thru authorisation / automation if you are switching to a software support system else these need to be manually controlled by matrix. The next person in line will not sign till matrix is completed and checklist signed for compliance. this mau slow down but better than what's happening right now.
This is nothing new, rather very frequent in most organizations small or large. Systems are provided as tools to help managing our daily work; if not used and maintained properly to input and process data, no degree of sophistication would help. Having worked with a number of major corporations, using and investing in well developed contracts/procurement management systems I can only say that it happens a lot, but not difficult to overcome.
Like with all matters 'human' in the workplace, it requires continuous and diligent focus and efforts to train, motivate and monitor the users, frequent audits to check performance and usage for corrective actions, sometimes, unfortunately, 'constructive reprimands' are needed to bring everyone on track. It is important to have and allocate an adequate level or resources, systems and personnel combined and identified a budget needed for that to get support of your stakeholders. If you have a well developed contracts department with sufficient personnel, you could train and benefit of database technicians to handle such admin tasks regularly. I had the privilege to work in places where complex systems were designed and in place for contracts / procurement management. Every processing step would have key fields designed in such a way so if these were not filled as required, the user would be stopped from advancing to the next step and completing the task. And finally, such system would be directly linked with the AR/AP so that when getting to payments (this really matters for everyone) these would not be validated until the predecessors required activities/steps were adequately completed. That would be the show stopper. If a complex processing system is not in place, there is still good work to be done using well designed spreadsheets combined with your email messaging board to prompt actions due.
All in all, patience and interest in working with, and helping people to raise the bar and become professional in everything they do, small or big.
• ATCO Electric
We had similar situation. It is always same, nobody wants extra work, or deviate from their routine what they have been doing for years. We organized lot of information sessions, lunch and learn for key people to sell the idea to them. Once they were convinced that it is good for them and for the organization (or they realized there is no escape..), it was easy to implement our procedure and protocol with the key stakeholders.
I'm bringing in a contract management process from scratch, as previously I would receive instructions in a different form depending on the Sales person - and it was often a brain dump over the phone.
The approach I've taken so far is to approach the Head of Sales & the Sales Manager to get their support, but to also allign the information I want to capture with the information that they are looking for from the team.
It's useful to get backing from their team leads and try to demonstrate how the information your capturing will benefit them in regards to their targets. If they can see value, you'll find that they'll be having the battle for you.
I had the same issue with implementing a new tool nationwide. Agree with all of the answers - my solution was itemizing the ways that the tool would "benefit" the staff who were reluctant to learn the new application/system. ie legal ramifications, Good luck.
• UK Crown Commercial Services
We experienced something similar. We were able to run and produce reports which clearly showed at a very high level the number of gaps in the system info. We also put a sharp focus on the associated risks and missed opportunities that resulted from this. These reports were shared with senior management which put it firmly on the radar of those who needed to know. Important for us (and i imagine anyone) was to clearly link the risks with our organisational objectives so that it was very evident (even if some people thought it unimportant) how gaps in system info could and would limit our ability to achieve company objectives.
I think you'll find consistency across stakeholders is an issue across more than contracts. Each function sees only the value in what is important to their process. We have been able to reduce (not eliminate) the issues you talk about thru establishing a centralized contract area. Only individuals in this area have delegation of authority to sign contracts. Additionally, I will say we do work very well with our stakeholders.
This is a problem I've encountered as well at a previous employer. It's hard to overcome when the "stakeholders" don't want to cooperate because it's a burden. Perhaps a training session where you emphasize the importance of the system (and keeping accurate records) and answer questions about how to map the documents would be helpful. Good luck.
Education, education, and more education. When we revamped our contracting process, it was a major shift in our organization. You will need to effectively communicate the value of contract management and the importance of accurate records. I have gone as far as using examples of contracting scenarios that placed our organization at risk because of failure to follow policies and procedures. Also equally important is senior leadership buy in. Because this is a major shift, you will need the support of your senior leaders so the message is coming from the top. I found that we were making very little progress in changing the culture until we engaged the support of our senior leaders. Good luck!
Unfortunately this is a problem with the tediousness of the task and the fact that legacy CM systems require manually uploading the contract. Our CEO is a 20 procurement professional that got frustrated with the old way of doing things and figured out how to upload contracts automatically to address this issue. He's been using it on an M&A project where thousands of contracts have to be renegotiated and reassigned. It would take years to input those process those contracts manually and he's been able to do it in weeks with accuracy.
With the limited text it is difficult to provide a concise response, however based on your text my response would be:
Defined spend is customer focus based on financial spend limitation over the duration.
Work Order will define the deliverable and as such recognise when a deliverable criteria is complete / met and will trigger payment.
Change request will recognise change within the Work Order and will be important as to reciognise completion and hence trigger further payments.
Control and visibility of spend and growth within work orders will be important to the customer and the supplier.
• New Zealand Defence Industry Association (NZDIA)
A bit of a guess but it may be due to the accounting package they use which requires the raising of specific orders to trigger the right to get payment.
Some of the big packages are dogmatic in their requirements and which are hard to get around.
I am not familiar with the exact terms of your contract. But a work order and change request are not the same thing, one does not replace the other. The change request comes from your contractor and specifies what is requested as a change, this can be approved or not after evaluation. The work order is an order to start work that normally contains, scope, work methods, safety requirements, etc, but it is not a commercial document, it does not have commercial value, so if the contract will be amended you still need a change request and then a change order to seal the deal. Hope it helps,
• Hyland Software, Inc.
We enter into a SOW with our Customers that covers the basic terms and conditions and address the scope and pricing in the Work Order. This provides us the protection needed while giving the professional services department the ability to manage projects without involvement from contracts/legal.
• Australian Taxation Office
I am also guessing to fill some of the gaps in the information you've provided, but I suspect you have a services agreement of some sort. If you have a contract to complete a specific, once-off project, then you can pretty much define everything to be done in the SoW. With a services agreement on the other hand, you tend to define the services you want and agree a price, but you can't necessarily define in advance how many of those services you want or where or when you want them. We also have a spend over the whole term shown in our contracts - but it is only our 'best guess' based on what we know today and can change at any time.
For example, WAN services are listed in one of our contracts, with various different bandwidths and performance levels, and agreed pricing. At any time we can ask the provider to decommission a site (so that WAN link drops out of the equation and the total price) or connect a new building (in which case they start billing us for that new service, at the price already agreed in advance). We use something like a work order to do that (it's actually a non-standard service request in our case). So, the contract defines all the services we are buying or might want to buy in the future, and we use work orders to say "OK, now we want you to actually do that"...
• Phillips 66
We typcially describe everything in the Scope (SOW) and that document is the call off from the main master contract. But having said that we use SAP so a "paper" Sow has to be input into SAP in the form of a Service or Work Order for the SAP payables process to be enabled. So like one of your other comments that's probably the reason.
I would hazard a guess it could be for:
1) Paying invoices against an activity as there may be multiple work breakdown structures covered by the SOW
2) Financial approval when invoices come in. Ensuring that the contract owner is happy with the goods and/or services have met the requirements of your business
3) Allows you to track commitment and expenditure vs your budget (SOW work value)