Contract Management is a critical step in procurement as it’s the contract that defines your relationship with your suppliers, vendors or service providers. Effective Contract Management in procurement helps to ensure suppliers and buyers adhere to their agreed contractual obligations and it allows for negotiating any future changes that need to take place. Contract Management in procurement helps to ensure products/services are bought at the negotiated and agreed-upon price, they are delivered on time, regularly assess if the purchases made conform to quality standards, and so on. Managing contracts in procurement involve the following processes:
- Managing contracts’ legal documentation for establishing professional connections with vendors.
- Management of contractual terms and conditions as discussed and negotiated.
- Monitoring and executing agreed contractual schedule, deliverables and payment milestones.
- Assuring that the terms and conditions are being followed.
- Documenting and reaching an agreement on any modifications to activities performed by the parties involved.