Managing contract obligations across the enterprise

March 23, 2011

For many organizations around the world, contracts and agreements govern the way that they conduct business relationships with external parties, like customers, suppliers and partners.  In order for business relationships to be effectively managed and for your business to extract the maximum potential and value from your contracts with external parties, it is necessary to track and proactively manage contract milestones and obligations effectively.

Contracts invariably contain two types of data that need to be tracked and managed:  Milestone data (like critical dates, contract parties, contract values, currencies, etc.) and obligations or performance-related data.

While some companies may capture contract milestone data in spreadsheets or databases, it is relatively rare to come across businesses that adequately track and enforce compliance to contract-related commitments and obligations.  One reason for this may be the fact that historically, Contract Management has suffered from a lack of strong enterprise sponsorship and ownership.  We are now observing an increasing number of General Counsels taking on this mantel on behalf of the business to drive through ownership and responsibility for contract-related obligations and risk management.

Contract obligations may be applied to both your business as well as the external party and may include conditions that need to be complied with or tracked to adhere to corporate governance or industry regulations, quality commitments, performance targets, payment terms and schedules, etc.

Dolphin Contract Manager treats contract obligations as dynamic tasks that can be created, classified and allocated to the relevant business stakeholder who will have responsibility for ensuring that the specific obligation task has been adhered to or complied with.  The system includes a unique closed-loop compliance funtion allowing contract managers and business executives to monitor compliance to contract commitments and obligations and to provide the senior management team with management information about the status of compliance to contracted commitments and obligations.

To understand more about the importance of managing contract obligations across the enterprise, why not register for Dolphin Software’s free-to-attend web seminar on Tuesday the 12th of April 2011.  Further information can be found at:  http://dolphin-software.com/lp_contract_obligations.htm


Contract oversight for US Government contractors in the spotlight.

January 26, 2010

In the latest in a long list of poor contract governance and oversight examples relating to US government contractors, a report will be published early next week by the Special Inspector General for Iraq Reconstruction.

Stuart Bowen, Special Inspector General for Iraq Reconstruction, will strongly criticize the US State Department for failings in contract management and contract oversight in relation to the award of a contract to DynCorp International to provide training services to the Iraqi Police force.  The report suggests that some $2.5 billion has been wasted through poor contract management practices.

It is well known that there is a chronic shortage of qualified contract management personnel in the US Government.  Last year President Obama called for the recruitment of 19,000 new contract managers to improve government contract oversight with external vendors; but technology can also play a part in making government contract management more effective.

US government contracts are governed by a strict set of rules and regulations, called Federal Acquisition Regulations, or FARs.   FARs contain both clauses that need to be included in government contractor agreements (and in some cases, flow down to sub-contractors) as well as guidelines and regulations that need to be adhered to to.

Contract Management software solutions, like Dolphin Contract Manager, facilitate the effective management of FAR (and Department of Defense – DFAR) clauses and regulations through its unique FAR Clause Library and FAR Obligation Management functionality.  When coupled with contract milestone data management and management reports and alerts, contract managers are able to gain much greater visibility and control over contracted commitments and critical milestones.


Contract Management on the government’s radar

June 29, 2009

329px-Official_seal_of_the_American_Recovery_and_Reinvestment_Act_of_2009_svgSince the creation of the US government Stimulation Package, or American Recovery and Reinvestment Act 2009 to be precise, there has been a noted increase in activity and interest in the discipline contract management.  Interest in Contract Management has largely been driven by pressure from the public to force government agencies to provide greater transparency and justification for the vast sums of taxpayer’s money being spent to bolster the fragile economy.

It may have been a coincidence, but the topic of contract management in the military has also come to the fore in recent weeks, with the publishing of a highly critical report by the Wartime Contracting Commisssion on the wastage of public funds in Afghanistan and Iraq, where billlions of dollars have been unaccounted for and certain defense contractors, like KBR Inc., have scooped millions of dollars in performance bonuses because of poor contract oversight.

“One example of wasted money cited by the commission involves construction of a $30 million dining facility at a U.S. base in Iraq scheduled to be completed Dec. 25. The decision to build it was based on bad planning and botched paperwork. Yet the project is too far along to stop, making the mess hall a future monument to the waste and inefficiency plaguing the war effort”, says Richard Lardner of the Associated Press.  The US Army is due to withdraw from that location before that date.

With a bit of luck, increased visibility in to contract management issues at these governmental levels will be akin to new technological developments in the car industry through Nascar or Formula One, where the benefits technological developments infiltrate down to production vehicles; so in the world of contract management, hopefully greater attention on contract management issues at a governmental level will infiltrate down to other government organizations on a local level, and companies in the private sector.

The role of Contract Management software in Government contracting oversight
Contract Management in the public sector remains a  largely manual and inefficient process.  President Obama and the UK government have already gone on record in recent months bemoaning the lack of skilled and qualified resources to provide effective contract oversight needed to track government contracting.

Contract Management software solutions are not, in general, designed to eliminate people from the contract management process, but can provide significant efficiency gains and greater management information to allow more effective contract oversight and management.

Contract Management systems effectively allow organizations to track and manage contract obligations, spending and commitments, as well as helping to streamline the contract drafting, review, external negotiation and archiving process.

Many people and organizations understand that they need to manage and control their contract processes more effectively, but few are aware that there are robust technology solutions to streamline this effort.  Contract Management software systems should generally provide the following core areas of functionality:

  1. Contract Authoring, to streamline the contract creation process
  2. Internal approval workflows
  3. Central electronic contract repository
  4. External secure workspaces for contract negotiation
  5. Reporting and analytics, to track and manage contract milestones and commitments

With greater attention on where and how taxpayer’s money is spent, government agencies that contract with external parties to provide services to the public will need to become much more efficient in the way that contracts are created and managed in the future.


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