Contract Manager – Roles ....... Adjudicator Arbitrator Juggler Accountant Diplomat Contract Expert

The Essentials of Contract Management We do not “manage” the inevitable! This is about directing and prioritizing effort systematically to achieve organizational goals Management Corporate strategy SRM Commercial strategy Contract Administration Contract strategy Terms & Conditions Payment Management

The Essentials of Contract Management 4 Supply upside opportunities versus downside risks These must be understood and will “inform” corporate and commercial strategy Task specification 5 “Market Making” (supply market) Market testing Supplier goal-setting Supply economics Risk appreciation Contract negotiation

CONTRACT MANAGEMENT LIFECYCLE 1 Project Development 6 Mobilise 8 “Delivery” Management 2 Contract Development 7 Implement C.M.P 9 Commissioning and sign-off 3 Contract Management Plan Technical Workstream 7a 4 Negotiate Contract Financial Workstream 7b 5 Execute Contract Stakeholder Management 7c

Stakeholder Engagement Stakeholder Buy-in ..... Review of commercial strategy Outline business case Re-confirm roles & responsibilities + Project governance Audit trail Negotiation phase Final business case Delegated authorities Draft & finalize contract Sign-off Stakeholder agreement and commitment

Stakeholder Management Who is responsible for delivering the contract? Legal The Board Sales Executive Director Procurement Budget Holder Head of Business Unit Manufacturing Project Manager Quality Contract Manager End - User

BCMR – Basic Contract Materiality Assessment CREF BCMR Mechanism to Assess materiality of a contract Risk should lie where risk is best managed Client organisation should formally identify projects where a formal risk review will be undertaken Simple Excel format Organisation must understand and articulate its own risk appetite 5 inter-acting ‘dimensions’ Risk register used Contract ‘Materiality’ review is undertaken Risk should be considered Within regulatory framework SD5A

Commercial Project Strategy – major considerations Buying or Selling ? IPRs Passing of Title Payment Risk distribution Turnkey / Management Contracting Pricing Law / Arbitration Project Strategy Buying State of the Art ? R&D ? Outsourcing core functions Outsourcing non-core functions Supply Maintenance Consultancy / Professional Services Selling State of the Art ? Client Account attractiveness Routine or Special ? Distributors or Direct ?

Contract Management - Foundations Privity and Recitals Outputs / Deliverables IPR’s Liabilities and indeminities Ownership – passing of title Money Programme / Time Contract Management Plan Contract Pricing Strategy Commercial / Project Strategy

Contract Management - Foundations Who in your organisation is Responsible for considering these things?

Performance Shortfall Why contracts need managing What are the areas where problems are likely to occur? Cost Increase Performance Shortfall Time delay Disaster recovery / Force Majeure IPR infringement