What Is the Difference between Contract Administration and Project Management

Posted by on April 16, 2022

“. a continuous procurement process that ensures suppliers meet their agreed contractual obligations and negotiate any future changes that need to take place” (Chartered Institute of Procurement & Supply, Contract Management). Once you know what you want your contract management process to look like, you can start implementing the tools and systems needed to support these efforts. If you only need to manage a handful of contracts, you can probably track your deadlines, results, and other commitments with manual solutions such as shared drives, calendars, and spreadsheets. If you have more complex contract management requirements, consider implementing dedicated contract management software that allows you to track your agreements and important deadlines. It is a proven method for companies to bring clarity to employees by defining the differences between contract management and contract management. This can be achieved by recognizing that these are completely separate processes that may require overlap. Continuous and open lines of communication between contract management teams and contract management systems teams, especially as businesses grow, are essential (ContraxAware, 2019). Many of the functions of contract management include contract planning and development.

These functions include an understanding of all the important elements of the contract. Components may include delivery dates, payment dates, amounts, and conditions for acceptance or termination of the contract. Contract administrators often understand the means by which the performance of both parties can be measured to determine whether they are meeting their obligations, as well as procedures for monitoring the performance of both parties. The process of signing the contract between the parties involved is the last step to launch the project. For this reason, the ability to quickly obtain signatures from all parties involved, regardless of distance or location, is crucial to avoid delays. Contract management and contract management have several factors in common. Both competencies require a thorough understanding of how contracts work and how both parties can fulfill their obligations under such legal agreements. The main difference lies in the timing of these tasks. Contract administrators determine how the contract is formulated before the parties accept the agreement, while contract administrators ensure that each party is able to fulfill its contractual obligations after the agreement is signed.

Companies that have a large portfolio of contracts or are responsible for high-value or high-risk contracts often turn to dedicated software to help them manage these important agreements. For this reason, it is useful for contract managers to have at least a basic understanding of how to use the software solutions that will allow you to successfully meet your contracts and obligations. An effective contract management tool ensures a professional approach to contract management that better facilitates risk management and increased profitability, and provides a clear return on investment (ROI) on the costs versus benefits of contract management activities. Best practices for contract management, such as implementing contract management software, improve the quality of customer relationships and maintain an open line of documented contractual communication. This avoids contractual disputes and escalations. Contract managers need to familiarize themselves with research, risk analysis and cost-benefit assessments. Great attention to detail and sophisticated organizational skills are also crucial. Contract managers often work with a company`s legal and finance teams because the contracting process has legal implications. Therefore, they must have a good understanding of the risks of each potential contract and the potential legal and financial consequences associated with it.

Project changes are guaranteed to be made throughout the project lifecycle from the start of the work. Changes to the project must be carefully managed and any changes must be communicated to the appropriate parties. All data and information about changes in contractual deadlines, budgets, expenses, etc. must be fully tracked and shared with the teams involved. To avoid contractual disputes and maintain positive relations between the two parties, everyone involved in the contract management process should be aware of the financial terms of the agreement, including the value of the contract, payment intervals, and the process to meet the need for additional expenses (depending on the type of contract). The functions of a contract manager vary depending on the contract and the type of construction project. Each contract will have a unique set of requirements. The consistent factor is the clear definition of the terms of the contract and the guarantee of communication and good relations between the employer and the contractor. Contract management and project management have a lot of overlap. While responsibilities vary widely between project managers and contract managers, contract managers focus on managing the entire contracting process throughout a project`s lifecycle.

If you`ve ever worked on a major project, especially a construction project, you`re familiar with the concept of contract management. An employer hires a contractor to do the job. Both sides agree on what the work will look like, how long it will take and how much it will be worth. These details are presented and consolidated in an official document; a contract. Contract management is often confused with contract management, but the two are not synonymous. Contract management is a process that only takes place before the contract is concluded. .