Contract management services are the management of purchasing and supply contracts by external consultancy companies. These are two-fold. The first is a service provided to purchasers who require one or more of their contracts to me managed.
The second contract management service is when a supplier requires their contracts to be managed. Supplier contract management is particularly popular amongst independent contractors who undertake several small contracts a year. They have taxation and financing challenges as well as a need to have their accounts completed. The contract services offered to independent contractors usually consists of:
• Contract production so that only tax effective contracts are used.
• Tax advice and tax avoidance advice.
• Financing assistance including introduction to finance companies that specialize in independent contractors.
• Accountancy services.
There are contract management systems (CMS) that manage the entire contract lifecycle for purchasing departments. For those companies that do not have the financial ability to install their own CMS then numerous consultancies offer contract management services that include the use of a contract management system. Their services usually consist of:
• Confidential use of a CMS.
• Contract drafting.
• Drafting of any Service Level Agreements (SLA’s) that may be required.
• Contract management throughout its lifecycle.
• Management of any Service Level Agreements (SLA’s) attached to the contracts.
• Management of any contract problems.
• Exception management when changes to the contract happen or are instigated by either party.
• Management of contract awards.
• Risk management as they appertain to the contracts.
• Warnings when contracts are due to expire.
• Automatic renewal of contracts as required.
• Management information on the performance of the contracts including drafting servicesany problems and exceptions that may have occurred.
Contract management services are particularly popular with local governments, government departments, universities, hospitals etc. This is mainly due to the need to be seen as unbiased in their contract award and management. A secondary need would be to minimize contract management costs.
Many consultancies specialize in one particular industry sector. Complex areas such as facilities management, transport, travel and part time staffing are particularly popular.
With the popularity of outsourcing, there are many consultancies springing up that will manage complex outsourcing contracts.