This course on Contract Management and Negotiations covered three key areas: contract management, what to negotiate, and the negotiation process. The management of contracts involves three phases: pre-contract, execution, and compliance. A Supplier Relationship Management system (SRM) can assist in tactical requirements such as centralizing contracts, creating templates, and ensuring compliance with suppliers. The laws that govern contract execution and compliance are the Uniform Commercial Code (UCC) for the United States and the Convention on Sales of Goods and Services (CISG) for international commercial agreements.
Negotiation plays a crucial role in contract development. We discussed the difference between negotiation objectives and the negotiation process. Depending on the purpose and type of agreement, the negotiation objectives are defined. The negotiation process involves understanding the situation and then using the PDCA framework (planning, doing, checking, and implementing) to move forward with the contract.
Even when it is not feasible to go through each step of the process outlined above, be sure to ask the three critical questions:
1. What do they want?
2. What do I want?
3. How do we bridge the gap?
To ensure a mutually beneficial agreement between the buyer and seller, it is essential to have a strong understanding of negotiation fundamentals. For additional resources, we suggest visiting the Additional Resources page and exploring recommended readings and materials. One valuable resource to consider is the Contract Management Cycle model, which was created by CIPS. This interactive tool can help improve your Contract Management processes by enhancing scoping, planning, implementation, management, and review skills. CIPS is a United Kingdom-based membership organization that provides education and professional qualifications for Procurement professionals worldwide.