Contract management with CATS CM® version 4. Gert-Jan VlasveldЧитать онлайн книгу.
Phase 6 – Termination and evaluation
This is the phase after the delivery term of the WTBD has ended and the contract managers on both sides start to finalize the other agreements. This finalization process takes place both within their own organization and the contracting organization as far as it concerns the agreements made with the other party. The termination phase will be complete when there are no more obligations regarding performance or compensation. In other words: when everything has been delivered and invoiced, or when this is not the case, an agreement has been reached regarding how to handle these situations.
4.1.2. The CATS contract life cycle, the CATS CM methodology and how contract management knowledge contributes to contract creation
The contract life cycle also has an important transition moment, which is the moment the contract is finalized and the parties involved all sign the contract. At this moment, the contract manager becomes the officer responsible for the contract and starts applying contract management according to the CATS CM methodology. During the phase before contracts are signed, contract management knowledge is just as crucial. The agreements that relate to contract management in the interaction between client and supplier are part of the AOCM. By making the right agreements, the contract manager can manage the contract effectively and efficiently. Figure 4.2 shows the schematic relationship between contract management knowledge, the contract management process, and the CATS CLC phases.
Figure 4.2 The relationship between CATS CLC, contract management input, and the application of CATS CM
Although the contract management process starts with the finalization of the contract, the input that contract management knowledge offers is crucial during the three preceding phases. This knowledge ensures that the right agreements are included in the contract, giving the contract manager tools to properly manage the contract. Good knowledge input results in a more profitable application of CATS CM. Such knowledge has to do with making agreements about contract governance, reports, progress assessments and measurements, and the procedures for contractual adjustments. Achieving the contract objectives, and thus fulfilling the contract as a whole, benefits from the specific knowledge and experience that contract managers provide.
This is also why a growing number of organizations categorize this knowledge under the term contract management, sometimes with added specifications to indicate that it concerns these phases of the contract life cycle, such as pre-award contract management. To avoid confusing methodical contract management with the CATS CM methodology during the execution phase, we identify the contract manager’s input before the methodical approach starts as the contract manager’s involvement during the contract creation.
The contract manager involved during contract creation may or may not be the same person as the contract manager appointed to handle the execution phase. The benefit of having the same contract manager involved in all phases will be obvious as this person already knows all the ins and outs of the agreements when the execution phase kicks off. At the same time, there is a risk that this person will be blind to certain issues due to overfamiliarity while a newly involved contract manager will be able to identify them. After all, contract managers who have been involved for a longer time know the context and unwritten information, and interpret the contract based on their involvement during the process. This makes it easier for them to overlook omissions or mistakes. When the involvement of the same contract manager is desired – or required – during both phases, this risk can be avoided by having a second, independent person go over the contract and other documents from the contract file.
In choosing to retain the same contract manager or to appoint another contract manager for the execution phase, an organization also ensures that this is a well-informed decision when it comes to the required competencies for the different phases. The various phases have different dynamics and thus require different competencies. One particular contract manager may not have all these competencies, so this can also be a valid reason for having a different officer involved in the contract creation phase than the contract manager handling the contract performance process.
Public tenders
For organizations required to issue public tenders, or suppliers that respond to public tenders, the content of the contract can be fixed early on in the process, in the form of a draft contract attached to the request for proposal. We see this situation more and more often, even when no public tender is involved. The consequence of this is that the client carries out several activities from the contract management process following the CATS CM methodology for the first time in the early stages of the contract life cycle. Such a particular situation requires special attention when making the CATS CM methodology organization-specific.
4.1.3. Roles and responsibilities
Based on figure 4.2, the responsibilities of different roles involved in the CATS CLC can be identified. We would like to point out that some of these roles are not involved in the entire CATS CLC. Proper specification of the responsibilities and their allocation to the different roles is crucial to the creation of a successful contract. We explicitly use the term ‘role’ because, in our experience, the person who is responsible for the activities that are part of the contract manager role doesn’t always have the formal function of contract manager. This person’s business card often doesn’t say ‘contract manager’ but rather names another function like: ‘customer relationship manager’, ‘project manager’ or ‘account manager’.
In the client’s organization, we define the following roles:
■ Demand owner: the person who compiles the requests and requirements and, ultimately, uses the contracted goods or services. The demand owner is the primary person responsible for representing the group of users. The IT department, for example, is the first point of contact for IT services for the rest of the organization, just like the Facilities Management and HR departments are for their respective services.
■ Realization and verification manager: the person with the substantive knowledge of the goods or services that must be procured or purchased and who is capable of assessing the supplier’s performance in this area.
■ Buyer: responsible for the way the market is approached and for the substantive activities relative to the proposal and information requests, the negotiation phase, and the contract signing phase.
■ Contract manager: responsible for achieving the contract objectives through proper contract execution, termination and evaluation.
■ Contract administrator: responsible for the registration of all contract details that are generated during each phase of the contract life cycle and who provides all other people involved in the contract with the information they need.
The extent to which a person is involved in and responsible for a (set of) activities is generally expressed based on the RASCI-model (a variant of the RACI model). The letters of this acronym stand for:
■ R: Responsible - responsible for the result.
■ A: Accountable - ultimately accountable.
■ S: Supportive - offers support or carries out activities.
■ C: Consulted - must be consulted.
■ I: Informed - must be informed.
Table 4.1 shows the distribution of responsibilities, in RASCI levels, of the people involved at the client’s organization during the CATS CLC phases. The I level is left out because this is an organization-specific consideration of the design of this level.
Table 4.1 RASCI table for the client showing the CATS CLC phases