Hi Lisa - look, I'll give this a go. And these are my personal views and experiences.
Mission critical parts to us would mean that it would likely be called a Significant Service Contract here in New Zealand. Right now, with a greater focus on broader / social outcomes in place across many organisations, internal culture might indeed get a rating, or be evident in measures about environmental outputs, staff training or recruitment.
That said, you'd expect for mission critical parts that the greatest weighting would be their ability to deliver, and depending on the total weightings, it's probably likely that a company that can show this better, even with a lesser internal culture, would be likely to end up chosen in a supplier relationship.
Yes, at least to the extent that 'culture' reflects underlying honesty and integrity. If something is mission critical, it is essential that the supplier is reliable. It is also important that they do not represent a reputational risk, especially if transfer to an alternative supplier would be difficult or take time to achieve.
I worked in several Russian companies as Contracts Manager and in related roles at both domestic and international projects. What I can tell you exactly is that there is no such thing as specific Russian Commercial Management, there are may be some cultural differences between Russian and Western Europe management style, but methodological basis is based on the same principals and sources.
If you have any specific questions, I'll try to share with you my thoughts and observations based on my past experience.
• University of Grenoble
Thanks for your answer, this confirms what I had originally thought!
Is there any reason why there isn't any Russian Commercial Management? Is it linked to hierarchy in the business structure?
Also, would it be worth adapting it to Russia? Or is Russian "Contract Management" more of a legal job better suited to lawyers?
Hi - at my workplace we are mainly dealing with FX related claims that are being submitted as force majeure. In these cases, they are (b) - in that did the party have an opportunity prior to the FM event occurring to reasonably speaking, manage and treat the risk.
! disclaimer - I don't know anything about Australian law !
but I don't see how option a) can be reasonable.
Risks can appear as time goes by due to changing circumstances and something that is not reasonably foreseeable at one point in time could well be later on.
My apologies for the delayed reply to your question.
In general, the clause is referring to an issue that you could reasonably have anticipated and therefore could have prepared for it in some way. That means not only before inception of the contract, but also during its performance.
Even in a case where Force Majeure applies, there is a duty to take reasonable measures to mitigate its effects.
In the case of the pandemic, there are many debates over whether and in what circumstances it represents a Force Majeure event. However, even when disallowed, there may be grounds for claiming frustration of contract or impossibility of performance due to related events.
Hi Cate - look, I'll rise to the challenge of the discussion here. Here's the link to this on the IACCM website, and it's also on the commitment matters blog. www.iaccm.com/resources/
In defence of the Western world, I'll say two things :
1. I think that the relationships of many organisations and their teams are certainly being put to the test right now. Personally, I'm seeing a lot of good outcomes in these challenging times across a number of organisations, especially in the emergency sector which I think is an indication that the relationships, albeit perhaps not as deep as those in Asian culture are seeing good outcomes.
2. I'd turn this question around and, perhaps take the heat off the negotiators, ask if it's the organisations who are stupid, or perhaps better put naive. Again, I see a lot of good stuff in this area. IACCM ave challenged the thinking of people and asked why in times of performance, do we go straight to the penalty clauses after courting a supplier through the RFx process. I see many organisations, my own included, using the Significant Services Contract Framework put out by MBIE in New Zealand to make these relationships stronger. For instance, for every such contract, our CE meets with their CE annually which is evidence that perhaps it's not all lost. But I think many negotiators and those in procurement often have budgetary constraints or drivers set by the business. That is, either they can't invest time and money doing this, or their focus set by their leaders is more focussed on cost reduction as a measure of success.
Hopefully others in the Western world reading this will step up and agree or contribute, or perhaps those from the Asian culture might want to post and share their views and experiences as well.
In terms of the 8 different payment schemes I was specifically referring to what we call 'payment curves' (see attached graphic) as opposed to payment regimes such as cost+ (time and material), fixed price, cost + fixed fee, etc. In this light these are grouped into 5 main families with a couple of variations inside each. These are as follows:
- 'all or none' payment curves
- Linear payment curves
- Non-linear payment curves
- Alternative payment such as demerit point and visual payment curves
- Matrix payment curves
The intent of this discussion is to simply highlight that the choice of payment curve, similar to the choice of performance measure and level, can have a significant impact on the success (or otherwise) of the overall performance management framework. My blog (www.performancebasedcontracting.com) has 3 posts specifically on this topic including the graphics.
I hope this helps and answers your questions. However, please let me know if you have any further questions.
Hi Mark, Happy to discuss. Send me an email via email@example.com and I can talk about the principles I use.
In my view I don't believe, as a community, we have fully bottomed out all the risks associated with these types of engagement.
• Nokia Solutions and Networks Australia Limited
For a very good, concise review of the principles and issues of cloud agreements generally, covering most of your points above (my view anyway), you might also check out David W. Tollen's book "The Tech Contracts Handbook" online or via this website:
I agree with the idea, basically due to the possible huge claims that may cause extreme damage to the supplier.
sometimes the liability is capped to the total amount of the contract money value, which seems only fair to me as a professional against going with unlimited liability clause, however is there any case that this may be rejected by the client?
This is a good notion. I recall many years ago a friend of mine who had a well documented idea for a screenplay. The agent he showed stole it (allegedly) and a big entertainment company benefited (allegedly). My friend wanted to sue and he had a great case, but the other side simply put a giant pile of money on the table with a grinning lawyer sitting on the top of it and he had to back down. If he had the option to settle "a couple of hundred" I think he would have taken it.
• UK Department for Education - Education and Skills Funding Agency
the problem with limiting losses to the contract value is that in a professional services situation for example the advice given will relate to a much higher value. Eg. advice given costs £300,000 but the advice given is about the terms of a construction contract worth £10,000,000. If the works are faulty and have to be rebuilt, and the contract cannot be relied upon as a result of negligent advice, the loss to the client may well far exceed the £300,000 fee level. the client should be able to pursue the builder but here can't due to negligent advice from the lawyer. the client should be able to pursue the lawyer, but if they agreed a cap of £300k they will not get very far.
Hence you often see clients wanting a cap related to the value of the contract advised on rather than the fees paid for the advice. Insurance should be taken out but that may not cover all losses.