Task: Manage Contracting Vehicle
This task focuses on managing contracting vehicle.
Disciplines: Project Management
Purpose
  • To ensure that both parties to a contract fully meet their respective obligations as efficiently and effectively as possible, in order to deliver the business and operational objectives required from the contract and in particular to provide value for money
Relationships
RolesPrimary Performer: Additional Performers:
InputsMandatory:
  • None
Optional:
    Outputs
      Steps
      Plan for Negotiations

      Contract negotiations are time-consuming and intensive but are key to the success of the project in achieving the right deal with the right vendor. Planning is essential to ensure they stay on track. Identify the order in which parts of the contract are to be tackled, the review points, and who is involved in developing and reviewing them.

      Identify specialist resources, legal, financial, technical, and so forth, and ensure they are available when required.

      Ensure the Right Contract is in Place

      A good contract should set out the obligations of the parties in a way that is clear, complete, concise, and unambiguous.

      The contract should also form the foundation for a productive relationship built on communication and trust. If the contract was poorly constructed, it will be much more difficult to make the relationship a success.

      The foundations for contract management are laid in the stages before contract award, including the procurement process.

      The content and focus of an Contracting Vehicle depends on the type of agreement it represents. For additional contract management details, refer to the following:

      Facilitate Dispute Resolution

      Contractual disputes are time-consuming, expensive, and unpleasant. They can destroy client/vendor relationships painstakingly built up over a period of time and can impact the supply chain. They can add substantially to the cost of the contract, as well as nullify some or all of its benefits or advantages. They can also impact on the achievement of value for money.

      It is in everyone's interest to work at avoiding disputes in the first place, and emphasis should be placed on improving relationships between the client and vendor through teamwork and partnering. Inevitably, however, they do occur; and when they do, the importance of a fast, efficient, and cost effective dispute resolution procedure cannot be overstated.

      Dispute resolution techniques include:

      • Negotiation - the most common form of dispute resolution where the parties themselves attempt to resolve the dispute.
      • Mediation - a private and structured form of negotiation assisted by a third party that is initially non-binding. If settlement is reached, it can become a legally binding contract.
      • Neutral evaluation - a private and non-binding technique whereby a third party, usually legally qualified, gives an opinion on the likely outcome at trial as a basis for settlement discussions.
      • Expert determination - a private process involving an independent expert with inquisitive powers who gives a binding decision.
      • Arbitration - a formal, private and binding process where the dispute is resolved by the decision of a nominated third party, the arbitrator, or arbitrators.
      • Litigation - the formal process whereby claims are taken through the civil courts and conducted in public. The judgments are binding on parties subject to rights of appeal.
      Prepare for Change

      Define change control procedures for maintaining and updating the contract. Change control procedures are essential if the contract is to be kept up to date with a clear audit trail of decisions taken; failure to do so can put the organization and project at risk.

      There will be a lot of documents exchanged with the vendors, so ensure there is a configuration management plan in place to cover version control, routing, storage, and so on, and resources to implement and manage it.