Introduction
There are some general similarities in contract management plans for goods, works
(construction), and services, but there are also key differences to consider when managing each
type of contract.
All plans will address core elements like contract administration, performance monitoring,
communication protocols, risk management, and change order procedures but the overall
objective remains ensuring successful project completion within agreed-upon terms.
Differences in these could ( 1) Deliverables where Goods focuses on quantity, quality, and
timely delivery of physical products, Works Manages construction activities, milestones, and
adherence to specifications and Services tracks the quality, timeliness, and adherence to agreed-
upon service levels. Also on (2) Performance Measurement; there are Goods inspection
procedures, verification of specifications, and adherence to delivery schedules and Works with
Construction progress monitoring, quality control checks, and adherence to safety regulations
and Services takes the Performance metrics based on service level agreements (SLAs), client
satisfaction surveys, and adherence to agreed-upon timelines. (3) Risk Management; Goods
Delays in shipment, damage during transport, and quality control issues, Works: Safety hazards,
delays due to weather or unforeseen circumstances, and cost overruns, Services; Staff turnover,
service disruptions, and scope creep (requirement changes).
Contract Management Defined
Contract management is the overall process of creating, overseeing, and enforcing agreements
between parties. It's essentially the lifecycle management of a contract, from beginning to end.
Here's a breakdown of the key aspects:
Scope:
Covers agreements with various entities like vendors, customers, partners, or even employees.
Involves both creating the contract (negotiation, drafting) and ensuring its proper execution
(monitoring performance, enforcing terms).
Key Activities:
Pre-award: Drafting, negotiation, approval processes for the contract.
Award & Execution: Ensuring proper signing, managing deliverables and deadlines as per the
contract.
Post-award: Monitoring performance, addressing any issues, handling renewals or terminations.
Recordkeeping: Maintaining a central repository for all contracts and related documents.
Benefits:
Reduced Risk: Minimizes the chances of non-compliance, missed deadlines, or disputes.
Improved Efficiency: Streamlines contract processes, saves time, and avoids delays.
Enhanced Visibility: Provides better oversight and control over agreements.
Stronger Relationships: Fosters trust and collaboration with contracting parties.
Tailoring the Plan:
The level of detail will also vary depending on the complexity of the contract. For instance, a
high-value construction project will require a more comprehensive plan compared to a routine
office supply purchase.
While the core principles of contract management remain consistent, there can be some
differences in the specifics of a Contract Management Plan (CMP) depending on whether it's for
Goods, Works, or Services. Here's a breakdown of the potential variations:
Goods:
• Emphasis: Emphasizes the Procurement of tangible items (e g, Equipments Supplies &
Materials. Construction, infrastructure, or building projects Covers intangible
services (e.g., consulting, training, maintenance)
Focus: The CMP might emphasize aspects like inspection procedures, quality control
measures, acceptance and delivery logistics.
Performance Monitoring: Tracking KPIs (Key Performance Indicators) related to
quantity, specifications, and timely delivery would be crucial.
Requirement: Typically involves a one time procurement process
Payment: Terms often tied to delivery milestones
Works:
Emphasis: Relates to Construction, infrastructure, or building projects
Focus: The CMP might delve deeper into project management aspects, including
milestone tracking, resource allocation, and safety protocols.
Performance Monitoring: Monitoring progress against timelines, budgets, and
adherence to building codes or engineering specifications would be important.
Requirement: Typically involves a one time procurement process
Payment: Payment terms often tied to project milestones and completion stages
Services:
Emphasis: Covers intangible services (e.g., consulting, training, maintenance)
Focus: The CMP might emphasize service level agreements (SLAs) that define specific
performance metrics and response times.
Performance Monitoring: Tracking KPIs related to service quality, responsiveness, and
achieving agreed-upon outcomes would be key.
Requirement: often involves ongoing or recurring services
Payment: Payment terms often to Service Level Agreements (SLAs) or Milestones
Here's a table summarizing the key differences:
Aspect Goods Works Services
Emphasis Procurement of Construction, Covers intangible
tangible items (e g, infrastructure, or services (e.g.,
Equipments Supplies building projects consulting, training,
& Materials. maintenance)
Focus Inspection, Project Service Levels,
Delivery Management, Performance
Safety
Performanc Quantity, Specs, Milestones, Service Quality,
e Delivery Time Budget, Response Time,
Monitoring Specifications Outcomes
Requireme Typically involves Requires ongoing Often involves
nt a one-time monitoring and ongoing or
procurement inspection recurring services
process
Payment Payment terms Payment terms Payment terms
Structures often to Delivery often to Project often to Service
Milestones Milestones and Level Agreements
Completion Stages (SLAs) or
Milestones
In Conclusion:
While the core principles remain the same, a well-crafted contract management plan should be
adapted to the specific requirements of goods, works, or service contracts to ensure effective
project delivery and mitigate potential risks specific to each category.
These differences impact contract management plans in areas like:
- Procurement processes
- Performance monitoring
- Payment structures
- Dispute resolution
- Contract termination
Remember:
These are general differences. The specific details of your CMP will depend on the nature of the
contract tied and A complex contract might involve elements from all three categories (Goods,
Works, Services). The CMP should reflect that complexity.
It's always a good practice to tailor your CMP to the specific contract you're managing.
