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Contract Management and Negotiations – Summary

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Contract Management and Negotiations covered three main topics: contract management, what to negotiate, and the process of negotiation.

Contract management has three phases that include: pre-contract, execution and compliance. A supplier relationship management system (SRM), once implemented, might assist in some of the tactical requirements such as securing contracts in a central repository, having templates, as well as compliance reviews and communications with suppliers. The laws that govern contract execution and compliance are the Uniform Commercial Code (UCC), which is specific to the United States, and theConvention on Sales of Goods and Services (CISG), which governs international commercial 

Negotiation is an important part of contract development. We explained the difference between negotiation objectives and the negotiation process. The purpose and type of agreement helps define what is negotiated or the negotiation objectives. The negotiation process involves taking time to grasp the situation and then moving on to the process steps, using the PDCA framework -- planning, doing, checking, and implementing (the action phase of contracts).

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, and 3) how do we bridge the gap. This is fundamental to negotiating an agreement that is mutually beneficial to both the buyer and the seller.

To learn more, see the Additional Resources page to explore suggested readings and resources.
For example, we recommend that you explore the interactive Contract Management Cycle model.

Developed by CIPS, the Contract Management Cycle further helps you improve scoping, planning, implementing, managing and reviewing your Contract Management processes

The Chartered Institute of Procurement and Supply (or CIPS) is a well-recognized, United Kingdom-based membership organization. CIPS offers education and professional qualifications for Procurement professionals around the world, including this interactive tool.

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