Contract Management Process: Step-By-Step

China Contract Services
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Managing Contracts with other Companies and Service Providers

When a company or business needs to get services from another company or business in an area of expertise outside of their own, they will need to arrange a contract for services. Generally, process of contracting can be broken up into six steps.

Step 1: Procurement Planning: Be Prepared

Phase 1 of contract management is procurement planning. This is a type of heavy preparation. Because many outside organization are going to vie for the same contract the manager will need to know all the ins and outs of what they are asking and what is being offered. 

Step 2: Solicitation Planning: Getting Ready To Ask

The next step in good contract management is solicitation planning. In this second ‘preliminary phase’ of contract management the manager prepares all the documents that will be needed in order to conduct business with outside parties.

Step 3: Solicitation: In Come the Bids

In the third stage, the contract manager opens the floor to bids and proposals from outside parties. In this stage of contract management it is important to review all the bids and proposals that come in as well as conduct proposal conferences.

Step 4: Source Selection: Who Do You Choose?

After a full review it is time to make a sound choice. If you had set up evaluation criteria, then hopefully it will have been followed. Once you begin final discussions with the contractor selected it is important to Obtain independent cost estimates from them as well.

Step 5: Contract Administration: Everyone To Work

Once the contract has been signed and the work has begun then things can relax. However, overall administration of the contract is necessary for a good process of contract management. It is necessary that both parties live up to the agreement in full.

Step 6: Contract Closeout

Once the job is completed it is time to close out the contract. However, before doing so, make sure to process all final payments, and then document performance standards. Finally, remember to engage in a post contract audit.

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