“It’s not cookie-cutter,” said Christie Harris, MA, a contracting professional and adjunct professor in Villanova University’s Contract Management program. Every situation is different and it’s up to the contract manager to “find the most advantageous way” for your organization, Harris said.

The skills necessary to be an effective contract manager are varied, reflecting the amount of detail that goes into creating and administering a contract.

As Harris put it, “You’re wearing a lot of hats.”

Legal and Financial Knowledge Are Key

Contract managers must be well-versed and up to date on any legal issues that their contract may involve, Harris said. Particularly for contracting professionals who work for or with the U.S. government, this means knowing the Federal Acquisition Regulations (FAR) System, which establishes guidelines for the government’s purchase or lease of services and goods.

Another role contract managers play, Harris said, is business adviser. Contract managers seek the most advantageous terms for the client but also must make them agreeable to both parties.

Contracting professionals who work for the government have the additional duty of “being a fiduciary steward of the taxpayer’s dollar,” Harris said. That means trying to “get the best bang for the government’s dollar” by encouraging competition among service providers in order to keep costs as low as possible.

Fortunately, contract managers usually have legal and business professionals in their organization to whom they can go to for guidance.   

“No contracting officer works in a vacuum,” Harris said. “It’s teamwork. They work with technical specialists, policy analysts and budget managers.”

Communication Skills Go Both Ways

Being a good communicator is essential for effective contract managers, Harris said. While that includes being able to write and speak clearly, sometimes it means staying quiet.

“You have to listen to the contractor, you have to listen to your COR (contracting officer representative), you have to listen to the government customer, you have to listen to know what is going on,” Harris said.

Communication also means staying current with industry and legal developments. Clear communication with outdated information amounts to nothing.

“Training, going to classes, seminars, conferences,” Harris said, “make sure you’re staying sharp with your skills.”

Math skills can aid effective communication as well. Contract managers sometimes develop cost and/or price analysis reports, as taught in Villanova’s Certificate in Contract Management program. Math skills come into play as the contract manager charts monthly sales and answers stakeholders’ questions regarding profits and spending.

Ethics and Documentation

Harris said ethical behavior includes “not doing anything that even looks improper.”

Clandestine meetings with contractors and sharing information that’s private or classified are obvious breaches of ethics that must be avoided. Beyond that, ethics include “documenting everything appropriately, dotting the i’s and crossing the t’s, going by the book,” Harris said. “There’s a lot of documentation and paperwork.”

Ethical behavior includes “making sure you’re following contracting guidelines and agency supplemental guidelines,” Harris said. As with communication skills, that means staying up to date with developments in the industry, especially legal ones.

That’s particularly important for contract professionals who work for the government, such as Harris, who is employed by the U.S. Department of Homeland Security.

“As an agency that falls under the executive branch, we are required to report to Congress all our contractual actions,” Harris said. “Leadership is accountable to Congress. They will explain what occurred with the fiscal year budget and ensure the agency is abiding by appropriate regulations.”

More Contract Manager Skills and Competencies

The Contract Management curriculum recommends several skills and qualities for contract managers. Among those are:

• An analytical mind
• Understanding the impact of decisions
• Organizational skills
• Planning/project management
• Understanding process, roles and responsibilities

Also included in the course is a list of contract management competencies:

• Personal: A commitment to change and improvement; communication; interpersonal relationships, leadership, negotiation and problem solving
• Knowledge of employer and industry: Specifically, knowledge of products and services; goals and strategies; local and global production; logistics, capabilities and needs; organization/management system/business process
• Client relationship: Consulting, relationship management, understanding clients’ needs, understanding market industry and norms

Ultimately, these competencies aim to keep the contract manager’s focus on the client.

“Who is your audience? What are their needs? What kind of information do they need to make a decision?” the program teaches. “This is part of problem-solving.”

Many Disciplines, One Profession

“It’s not just one discipline,” Harris said of contract management. “There are several disciplines contract managers utilize in fulfilling their job responsibilities.”

Like many Villanova instructors, Harris brings years of professional experience to the classroom, and is able to illustrate lessons with examples from her career.

“Instructors who have real life experiences to share,” Harris said, are one of the qualities of Villanova’s 100% online Certificate in Contract Management program.

The program is designed for professionals who want to pursue a career or advance their expertise in contract management. The curriculum aligns with the National Contract Management Association (NCMA) Contract Management Body of Knowledge and covers how to effectively practice contract management in the public and private sectors. The program can also help students prepare for the Certified Commercial Contract Manager (CCCM), Certified Professional Contract Management (CPCM) and Certified Federal Contract Manager (CFCM) certification exams from NCMA. Villanova’s contract management curriculum is pre-approved for NCMA’s continuous professional education (CPE) points.

“These classes prepare you for taking the National Contract Management Association certification,” Harris said, adding that passing an NCMA exam “makes you much more attractive to employers because it shows that you are obviously very serious about your career path.”

“After a contract has been awarded, you think you’re done but actually, no,” said Christie Harris, MA, an adjunct faculty member for Villanova University’s Contract Management program. “Contract administration is a big part of contracting.”

Contract administration begins with a post-award kickoff meeting (or, if the U.S. government is one of the parties, a post-award orientation conference). This event gathers together all of a contract’s stakeholders to review the document in detail, ensure that all parties are on the same page with the contract’s stipulations and to resolve any conflicts before they arise.

Villanova’s Essentials of Government Contract Management course teaches that the post-award kickoff event can either be the starting point for success or failure depending on how well the meeting is planned and executed.

When and Where Does a Post-Award Kickoff Meeting Take Place?

Harris, who is a contracting officer with the U.S. Department of Homeland Security, said she schedules the post-award meeting within five to seven business days of the contract being signed.

She said the meeting can be held offsite but that “nine times out of 10” it takes place at a government facility, such as Harris’ workplace.

As taught in the course, the meeting could even take place over the telephone or by email, “if there’s not a lot of complexity.” 

Who’s Invited to the Kickoff Meeting?

The program manager and the contracting officer, or the contracting officer’s representative (COR) must attend the meeting. Depending on the project and the number of stakeholders, the roster of attendees can be longer.

A team representing the government can include a technical specialist, end user, as well as representatives from the legal and budget departments, Harris said.

On the other side, the contractor assembles a team from his or her organization that can include the program manager, the business developer, representatives of the organization’s leadership and key personnel related to the project. The organization’s president may also be in attendance, “depending on the dollar value of the contract,” Harris said.

What Happens at the Post-Award Meeting?

The Essentials of Government Contract Management course refers to the post-award kickoff as “a meet and greet,” and while it’s more than that, having stakeholders on both sides meet face-to-face is significant.

“We introduce each other and give each other business cards, and everyone knows who’s who,” Harris said. “Now we have faces to names.”

The focus then turns to the meeting’s agenda.

“Prior to this meeting I’ve created an agenda and I’ve sent it to the contractor, program manager and whoever else is connected to this contract that I’ve been working with,” Harris said.

Besides letting attendees know the meeting’s itinerary, it also provides them with a chance to ask questions or suggest additions to the agenda.

“That way there’s no ‘Gotcha,’” Harris said. ”We’re all on the same team. That’s what I express at the orientation meeting. Now we are working on the same team toward a goal that supports the mission of this agency.”

The kickoff meeting is an opportunity to clarify the roles, rules and boundaries of the contract, according to the course, which describes the meeting as a chance for the stakeholders to establish a methodology to deal with problems before they occur.

Communication and Clarity is Key

One of the goals of the meeting should be establishing a communication plan.

Having a plan is essential in case the two sides have a conflict over some part of the contract. Also, it’s important to set a time limit for resolving conflicts and establish who is charged with reaching a resolution.

Resolving contract issues should take place as far down the chain of command as possible. If there is an issue, “people at the lowest level are going to address it. If they can’t resolve it, they move it up to the next level of management,” according to the course.

“The contracting officer should be the last person to receive an issue,” according to the course. “If possible, lower levels should try to resolve it before it gets to the contracting officer.”

The kickoff meeting also is important for providing stakeholders with a contact in the event they need assistance or guidance or have an issue with some element of the contract.

Harris said her message to stakeholders is this: “If there’s anything that the government is impeding, if you have issues, let me know what you need to get your job done.”

Harris said her primary concern is awarding the contract. She delegates many of the contract oversight duties to her contracting officer representative (COR).

Avoid Late Changes

As contracting officer, Harris is the only one who can change something in a contract. Changing a contract at this point in the process, though, is roundly discouraged and should be avoided if at all possible.

Any changes made to a contract at this point are likely to draw the attention of unsuccessful or other contractors that bid on and lost the contract.

Changes likely will bring protests from those unsuccessful contractors, delaying the project specified in the contract and at worst, stymieing it altogether.

The meeting’s length depends on several factors, such as the complexity of the contract and project, and the number and difficulty of conflicts that arise. 

“I find that the longer and more in-depth the meeting is, the less time I have to spend with administrative issues later on,” Harris said. “Let’s put everything on the table, let’s make sure we’re clear and on the same page as we’re starting out, so little administration is needed on the back-end.”

The goal, Harris said, is to have both sides “working together to achieve contract task requirements so that we can achieve the mission goals for the agency.”

Learn from Experience

Villanova’s 100% online Certificate in Contract Management program is designed for professionals who want to pursue a career or advance their expertise in contract management. Courses are taught by active industry practitioners that are experienced in the contract management field.

The curriculum aligns with the National Contract Management Association (NCMA) Contract Management Body of Knowledge and covers how to effectively practice contract management in the public and private sectors. The program can also help students prepare for the Certified Commercial Contract Manager (CCCM), Certified Professional Contract Management (CPCM) and Certified Federal Contract Manager (CFCM) certification exams from NCMA.

“Villanova has a great program in the sense that they have instructors who bring their personal and practical experience to the classroom,” Harris said. “In addition, it is great for learning Agile contracting and preparing to get certified in this field. Passing an exam makes you more attractive to employers because it shows you are very serious about your career path,” she added.

The government contracting professional and Villanova University adjunct professor is a world traveler who has visited more than 50 countries over the years.

When she’s not off to a different hemisphere, Harris can be found in the Washington, D.C., area where she lives and works.

Working for the Government

A scholarship brought Harris to Washington, D.C., where employment opportunities led her to a position with the federal government. That experience gives her particular insight into the field of government contracting, insight she shares with students in Villanova’s Contract Management program.

The New Jersey native earned her bachelor’s degree in International Relations from Principia College in Illinois. She was awarded a scholarship to continue her studies in international development at the graduate level, which brought her to George Mason University, about 20 miles outside Washington, D.C., in Fairfax, Va.   

“That put me in the D.C. metropolitan area where one of the biggest employers is the government, either working directly for the government or contracting,” Harris said.

After earning her Master of Arts in International Commerce and Policy, Harris began learning about government procurement from the other side of the fence, working for companies vying for government contracts such as Exxon and JWK International.

“That was my introduction to get experience with government procurement,” Harris said.

She worked as a cost price analyst, coming under the tutelage of a former federal employee who urged her to pursue a position with the federal government in the field of contracting “because it was growing and she thought I had a lot of talent and the government offered more stability,” Harris said.

Harris is currently a contracting officer for the U.S. Department of Homeland Security’s IT services department. “It gets technical, and although I’m not a technical person, I work very closely with the program office and they give me the insight I need to get the procurement,” Harris said.

Teaching and Certification

Since 2014, Harris has taught the Essentials of Commercial Contract Management, Essentials of Government Contract Management and Advanced Contract Management courses in Villanova’s College of Professional Studies. The University hired Harris as an adjunct professor in 2017.

Like Harris, other Villanova instructors in the contract management program are active industry practitioners, which Harris sees as a huge benefit to students.

“Villanova has a great program in the sense that they have people who are in this [field], who are doing the work,” Harris said. “They bring their real practical experience to the classroom.”

“In addition, it is a great preparation for learning agile contracting and preparing to get certified in this field, which does make students more attractive to an employer whether you’re in commercial or federal contracting,” Harris said.

Earning certification, she continued, shows “you’ve gone above and beyond to get certified in your field.”

Villanova’s Certificate in Contract Management program can help students prepare for National Contract Management Association (NCMA) certification exams such as the Certified Commercial Contract Manager (CCCM), Certified Professional Contract Manager (CPCM) and Certified Federal Contract Manager (CFCM).

Staying Up to Date

Harris is a member of the Washington, D.C., chapter of the NCMA, one of the oldest and largest chapters of the association. She said it’s a great organization for networking, as well as being a recognized organization that offers certifications for contract professionals.

Harris stays current with her industry and employer by staying updated on the latest news and trends published on websites such as Government Executive, U.S. General Services Administration, USA.gov and WIFCON.com.

She also holds several certifications including Level III Contracting Officer’s Representative, a Level III Federal Acquisition Certification in Contracting and a Mid-Level Program and Project Managers Certification, all from the Federal Acquisition Institute; and a Level I Program Financial Management Certification from the U.S. Department of Homeland Security. 

Globe Trotter

Outside of the office, Harris is a part-time water fitness instructor. She also enjoys abstract painting and cooking international cuisines.

She’s given herself plenty of opportunities for recipe gathering over the years, having visited more than 50 countries and seen five of the seven wonders of the world, and is determined to cross the other two off her list.

Among her recommendations for somewhat off the beaten path travel destinations…

• The Galapagos Islands, home to many one-of-a-kind animal and plant varieties
• Medellin, Colombia, once named the world’s most dangerous city by Time magazine, enjoying a post-drug cartel rebirth — “I felt safe there,” Harris said. “I recommend it. It’s a beautiful city.”
• Ghana, particularly Elmina Castle, formerly one of the primary depots of the slave trade — “That was very moving for me as an African-American descendent of slaves,” Harris said.    

Harris also has journeyed overseas for her education. She studied in Indonesia as an undergraduate, and in China while in graduate school.

While most contractors follow the rules of the contract, others may not deliver the work as promised. This can be frustrating to the competition who are overlooked because contracts are awarded based on value-added promises.

If a contractor promises, for example, to hire local labor or use locally manufactured materials, that is added value you don’t want to lose. Managing your contracts and following an effective contract closeout process can help ensure contractors meet their obligations.

Consequently, real issues resulting in contract neglect include out-of-control spending once a contract is awarded and damage to supplier relationships.

As highlighted in Villanova’s Contract Management program, strategic, long-term oversight is not occurring nearly as often as it should.

Agile contract management can have an impact on this issue. It was designed to ensure projects are completed in short and demonstrable steps while working closely with clients.

The Use of Agile in Contract Management

Agile uses sprints, which are short, focused project cycles where every member of the team has responsibility to see a project through to completion. By using Agile techniques in contract management, a team focuses on establishing good working relationships between the parties of a contract.

The reason neglect may occur in contract management is because professionals at the operations level, who typically get the responsibility, are often too busy to monitor contracts.

By breaking a project down into smaller cycles, there are frequent points of inspection, which increases the likelihood for a project to stay on track and on time and ensure that everything promised is getting accomplished.

The Agile method also prioritizes creating benefits for both customers and contractors instead of the traditional winner and loser in competitive negotiations.

Looking at the Flipside

When it is time to close out a contract, the contractor has much to do, says Marge Rumbaugh, in Villanova’s Certificate in Contract Management program lectures.

This is an important step in the process to ensure that the customer gets what they paid for, she says.

Contract closeout is the process of resolving all contract issues or fulfilling contract requirements. Contract managers might need to accept supplies and contractors might need to still deliver services or meet unresolved work statement requirements. It’s essential to do this before final payment is made.

“This is not a speedy process,” Rumbaugh says in a lecture. “It can take months, especially with cost reimbursement contracts. Once you add in indirect costs, cost sharing, cost-plus-fixed-fee and so forth, the months can add up.”

There are also ethics issues and disclosure agreements which can require the individual contract to continue until three years after a final payment has been made, Rumbaugh says.

“Even though you’ve received final payment, that doesn’t mean you can shred everything,” she says. “There are document retention requirements you also need to pay attention to.”

Navigating the Contract Closeout Process

Is There a Warranty?

Even after final payment, if a contract has a warranty, it makes the contractor liable to the buyer for an extended period after the work is finished.

Also, make sure any subcontracts are completed and settled before the prime contract settlement.

If There is a Service Clause, You Must Train Your Successor

When a contract ends or you don’t win it again, don’t pack your bags and head out the door, Rumbaugh warns. This clause provides that the contractor complete phase-in training for the new contract holder.

“The services clause says that you need to train the new company. So, not only do you have the indignity of having lost the contract, but you must help the next guy come in and do the job that you just lost,” Rumbaugh explains.

Handling Classified Material

If you are working to close out a government contract that involves classified materials, there are three options:

1. Retain data for follow-on contract
2. Return to the government
3. Destroy classified material

Government Audits

The government has broad rights to audit and shall make available at its offices, all records, materials and other evidence connected to a contract until three years after final payment.

Also included in the auditing process are the final overhead rates, determined by reviewing the contractor’s incurred direct and indirect costs.

The contractor is required to submit a final indirect cost proposal within 180 days of the close of its fiscal year.

The government must agree to those rates, or the matter can become a dispute.

Once the contract is closed out, remember to retain your records for the required time period, which could be from one year to six years and three months.

Led by expert practitioners, Villanova’s Certificate in Contract Management program teaches students how to navigate commercial and government contract management processes from contract requisition through contract closeout.

What is Agile Contract Management?

Agile methodology emphasizes individuals and interactions over process and tools, and prioritizes adaptability and rapid development. For contract managers in the supply chain industry, this mindset is valuable because it embraces flexibility, collaboration and a more iterative approach, postures that can help cultivate better collaboration and stronger relationships with customers. Agile contract management also enables businesses to adapt and accommodate more rapidly, so that when demand or technology changes, the entire contract doesn’t have to be amended.

Agile contract management requires all parties involved to collaborate and negotiate regularly on short, manageable sub-cycles, which naturally tends to help strengthen relationships. The goal of Agile contract management is to maximize value from the deal – in other words, everyone should win.

Rules of Agile Contract Management

Historically, contracts were focused on eschewing liability, avoiding conflicts and establishing hefty penalties for breaches. Today, contracts incorporate those items as well as help ensure compliance and quality. Pressure to demonstrate flexibility because of perpetual change driven by technology in the supply change industry has forced business to adapt.

Overall, this process should follow four steps:

• Establish Priorities and Emphasize Outcomes – Agile contracts are rooted in flexibility; all parties need to identify the top priorities, outcomes to avoid and ideal results. When these high-level final perspectives are kept in mind, all parties have more freedom to focus on less critical details along the way.

• Seek Feedback – Feedback between parties should kick off immediately and continue throughout the contract management process. True agility requires all parties involved to provide recommendations, feedback and seek compromise.

• Prioritize collaboration – An Agile contract should be approached as a collaborative effort from the outside, rather than two parties competing for the best individual outcome as adversaries. 

• Value transparency – Although an open feedback loop and collaboration lay the framework for transparency in Agile contract management, all parties must also value transparency in the face of issues. An attempt to mask or minimize an issue may result in the issue expanding in the long run or it may spur conflict or deception. The spirit of Agile is to adjust as needed – even if a problem or issue spurs the adjustment.

An Agile contract reflects the collaborative effort of everyone involved, representing buy-in from all parties, instead of a fraught negotiation. In the long run, this can help nurture long-term, mutually beneficial relationships.

Improving Supply Chain Performance: Agile Contract Management

When organizations approach contract management combatively or poorly, and then fail to manage what was agreed upon, results are often costly. Business relations can weaken or disintegrate, expensive disputes can result, or all parties can end up entangled in court battles.

Operationally, failing to manage contracts and ensuring expectations are met once signed can result in underperforming projects, “off-contract” spending, lapsed contracts, contract breaches, wasted money and scope creep. More strategic costs often involve supplier relationships, particularly if an organization neglects its contract management and continues to partner with a weak supplier, unaware of the areas where the supplier is not meeting the terms it promised. A contract is a living document that should be actively managed.

Contract management necessitates a final review to ensure the organization can deliver on all the items it commits to, whether it is legal- or sales-oriented. This isn’t a process that should be rushed, according to Villanova’s Advanced Contract Management course curriculum, as this review requires not only careful review of the contract’s content, but also a thoughtful comparison of other similar market agreements for fairness.

Contract management can also play an integral role in client relationships, as these relationships should be established with the benefit of all parties in mind, and each individual contract treated with that perspective. Suppliers are often assessing the organizations they partner with and measuring results. Thoughtful contract management can help ensure nothing is incorrectly agreed to, as well as help cultivate strong relationships across the industry.

Forbes identifies several ways Agile contracts can be applied to the supply chain in its article, “How to Create an Agile Supply Chain.” Benefits include the following:

• Better alignment with need – Applying the Scrum framework, an Agile supply chain management team can break down the overall supply into smaller teams, each pursuing faster, better output for their segment and better align the supply chain to customer need.
• Cultivating an environment for improvement – Agile’s devotion to efficiency means suppliers should be rewarded for finding better means to deliver. But instead of penalizing them when they fail in a new approach, Agile contracts should forgive errors and appreciate them as learning opportunities.
• Embracing adjustments within the contract – Contracts can include flexible options like zero-volume or buy-backs to allow freedom to scale to demand, which can help reduce waste.

Like Agile software development, Agile contract managers must be willing to listen to all parties involved, and adapt based on feedback. By seeking feedback, both at a supplier level and at an overall supply chain level, Agile contract managers can ensure each link in the supply chain adds value and contributes to making the overall supply chain efficient.

Interested in learning more about Contract Management? View the Contract Management program page.

Contracts can prove to be a great benefit for companies. However, most of the focus on contracts comes on the front end of negotiations. After that, many contracts are not looked at until it’s time for their renewal.

This can be a mistake and one that can cost businesses the equivalent of 9% of their total income, according to research by the International Association for Contract and Commercial Management. Mismanaging a contract also can lead to poor performance from the contractor, who may not live up to the deliverables promised in the original agreement.

How It Happens

Poor contract management is defined as not monitoring a contract once it is signed. This often happens when those in leadership or managerial roles negotiate contracts and then turn over the process to those at the operations level.

Caught up in the day-to-day workings of an organization, professionals at this level may not have the time or authority to monitor a contract.

If contracts are completed through a procurement department (often the case in public agencies), they are tasked as more of a process-oriented unit rather than an area of long-term strategy. A lack of resources to monitor contracts is a frequent issue across all organizations.

The Impact of Poor Contract Management

Losses occur in a variety of ways from poor contract management practices. Managing contracts throughout their full lifecycle will help reduce losses. Efficient contract management will result in stronger long-term relationships with customers and vendors and more success in your business overall.

Underperforming Projects

Some contractors do not deliver the contracted work as promised. While most contractors follow the rules, some take advantage of long-term contract situations. This frustrates other potential contractors, who find it unfair that contracts are awarded to “another supplier based on the value-added promises, which are then never monitored,” wrote University of Liverpool Management School lecturer Laura Menzies in a 2016 article for Public Finance titled, “The Cost of Poor Contract Management.”

Missing Renewals

In some extreme cases, no one realizes when a contract is expiring. This can lead to disruption in service or delivery of products that are fundamental to a business and cost them revenue. More frequently, companies do not renew contracts within a time frame that allows for discounts or a lower rate – something many contractors include when they first negotiate a contract in hopes of establishing a long-term relationship. However, those discounts are often available 30 to 60 days before the contract ends. That deadline is often missed without contract management.

Breach of Contract

Contracts can be breached for a variety of reasons, but sometimes it can happen because contracts are mis-managed. Breach of contract can destroy business relationships and add costs to a project, including damages and attorney’s fees. Breaches are commonly the result of poor communication with contractors on benchmarks and goals which can lead to issues down the road.

Opportunity Cost

The money that goes to underperforming contractors is money wasted. But this issue goes beyond the loss of the money spent. There is also the opportunity cost – loss of money and time that could have been spent on a contractor who completed the job satisfactorily the first time on budget and  within the scheduled timeframe.

Scope Creep

Contractors can overwhelm a company with additional costs by increasing the scope of projects. Sometimes these additions come from unforeseen circumstances and other times there are simply additional costs a contract allows them to charge. Scope creep can negatively impact project delivery deadlines as well as drive up costs.

How to Avoid the Risks

Contract management is a complex task. The first step for a company that wants to better manage contracts is appointing someone within the company to oversee them as the main focus of their job. This could even involve creating a new position.

The following are other possible steps to take.

Review the Process

This is where methodologies like Agile and Lean Six Sigma can be implemented to remove unnecessary waste and improve process efficiency. For example, Agile calls for a continuous feedback loop on the status of contract deliverables to ensure frequent collaboration between negotiating parties. Reviewing the current process, as in Lean Six Sigma, can help determine if a contract issue lies in the original negotiation, the renewal process or if processes were poorly defined.

Define Scope in Detail

Scope creep often occurs when a project’s parameters are poorly-defined. Clear, specific definitions on project scope need to be included in a contract at the beginning, with both parties acknowledging and agreeing to them.

While not usually a priority, it’s wise to evaluate the contract management process and adjust where necessary. The benefits for a company in terms of both money and opportunity are worth the investment.

Because the methodology breaks down a project into short-term cycles called sprints, Agile allows for faster development of products and services. It also incorporates frequent feedback from clients.

The methodology, which has worked well in software engineering and other industries, is designed to replace the cumbersome processes that used to – and in some organizations still do – govern new product development. One such process is that of contract management.

Benefits of Agile

Much as it does with other processes, Agile requires a different approach to contract negotiations.

It is often the case that those on either side of the table in a negotiation simply lay out their demands and refuse to compromise, which can lead to further project delays.

Agile does away with this mentality. It requires people on both sides to acknowledge that creating a contract is the ultimate goal of both parties. That means the best method for reaching this goal is one that includes frequent meetings between both sides.

Agile also requires both parties to understand that changes will eventually be made to a contract. Therefore, they should work together to set up a contract in which such changes do minimal damage to the parties involved.

In addition to focusing on mutual goals, flexibility and frequent collaboration, Agile also breaks contract negotiations into short-term goals. The result is that all sides complete the overall project more quickly.

Best Practices For Agile Contract Negotiations

Here are five best practices for leveraging Agile in contract negotiations. Typically, these negotiations occur between the supplier of a service, such as a software engineer, who is creating a contract with a client who wants to use the service to develop a product.

However, Agile can apply to any type of contract negotiation.

Develop Product Backlog Together

Before starting, you must know where you are going. Developing a product backlog that lists all the features needed for a finished product will provide everyone with a map. The backlog does not have to be overly detailed at this point, but it does need to prioritize what needs to be accomplished.

This cooperative effort creates a shared vision of the final product.

Small Steps

Begin with only one sprint to accomplish the first priority on the backlog. This way the first stage of the project is quickly delivered to the client and gives them the opportunity to provide feedback.

Regular Collaboration

The process of negotiating a contract should include meetings between both parties on a regular basis – even daily ones (called Scrums), if appropriate. Frequent meetings allow both sides to provide continual feedback and updates on the status of the current sprint.

Flexibility

The concept of Agile is built around the idea that changes will need to be made, but those changes should be built into the contract and shouldn’t hinder a project from moving forward. Changes will come out of the frequent collaborative sessions, which give both sides a voice in making alterations to improve the final product or the process itself.

Focus on Quality

Projects are often unpredictable. The research and work done on each sprint may uncover issues that alter timelines and the overall direction of the project. Such changes are expected, and the Agile contract allows for them. It doesn’t emphasize a vendor’s hitting all the marks as stated in an original contract. Rather it, focuses on the final goal: a quality product.

In the end, bringing Agile to contract negotiations is beneficial because it allows for the most innovative, creative work to get accomplished without the restrictions of traditional contract negotiations.

Those with advanced management interests typically study for the Certified Professional Contracts Manager (CPCM) exam, NCMA’s respected senior certification. Others with specialized interests may focus on either the Certified Federal Contracts Manager (CFCM) or Certified Commercial Contracts Manager (CCCM) exams. There are also two industry certifications: The Industry Certification in Contract Management–Defense (ICCM–D^®) and the Industry Certification in Contract Management–Federal (ICCM–F^®) options.

Fortunately, while each exam does require specialized knowledge, they are based on many of the same general contract management principles.

The Five CMBOK Competencies

Even if you plan to take a more specialized contract management exam, the five competencies in the Contract Management Body of Knowledge (CMBOK) form the core system of knowledge that should be fresh in your mind. These five competencies cover the baseline responsibilities required of a contract management professional and may be relevant even if seeking certification in commercial, federal or defense contract management:

• Pre-Award – The pre-award competency covers important knowledge areas and related background information before contracts are awarded.
• Acquisition Planning & Strategy – This competency focuses on how to seek out and secure sound contracts.
• Post-Award – Where the pre-award competency focuses on considerations before acquiring a contract, the post-award competency concentrates on what to do immediately after. These competencies are crucial to ensuring the success of the secured contract.
• Specialized Knowledge – In this competency, professionals find the variety of specialized skills and knowledge areas which, while not fitting into the above three competencies, are nonetheless important to overall contract management success.
• Business – This competency is more general, focusing on the business support skills contract management professionals need to work effectively. This includes a general knowledge of finance, accounting and economics.

General Study Tips

Beyond the specific knowledge required to pass a contracts exam, it is often useful to review and practice some fundamental study strategies.

Manage study time – Contracts exams are knowledge-based tests. In order to perform well, test takers should allow for sufficient study time in advance of the exam date in order to process and retain information. If test takers wait and attempt to cram at the last minute, they risk being tired and forgetting important points on the actual exam.

Organize your study space – Finding the right place to study is as important as how to study. A workspace should be comfortable and well lit with minimal distractions. For some, this may mean turning off, or putting aside, smartphones or closing any distracting programs on the computer. Others may study better in public spaces like coffee shops or around a table with a study group. Experiment with different methods to determine which study environment is optimal for you.

Use past exams – If possible, try to practice with real exam questions from previous contracts exams. Getting a feel for how questions are structured and how much time it usually takes to complete each question or section may be quite helpful.

Take regular breaks – Finally, try to relax. It is easy to allow exam preparation to consume all of your time, but burnout can hinder even the most diligent students. Take time to unwind and allow yourself to put studies out of your mind at regular intervals.

Summary

With the variety of certification exams available from the NCMA, studying for a contracts exam may feel a bit overwhelming. Fortunately, certifications complement each other in some ways. The CMBOK competencies are generally a good place to start regardless of your particular certification interest. As with any test, the key is to try to stay relaxed, to budget your time effectively and to practice with real study questions.

The first article in this series looked at how increasing public interest in ethical corporate behavior is causing a significant shift in company practices. Where some companies may have previously pursued profit above all else, even at the expense of the public welfare, high profile scandals have driven a campaign to rejuvenate corporate culture and increase organizational transparency.

What is Corporate Social Responsibility?

Corporate social responsibility (CSR) is a recent approach to business management where organizations take their ethical role more seriously, in the name of leaving a positive impact on culture and attracting previously disillusioned customers.

On its own, the specific requirements of CSR can seem vague, with each company free to interpret its social responsibility as it sees fit. Within the field of contract management, for example, the National Contract Management Association (NCMA) maintains its own code of ethics that is intended to trickle down to various CM professionals. Even so, there is considerable room for improvement, with the following recommendations having been proposed to help organizations improve their ethical image:

1. Ethics training – Just as organizations train new employees to do their specific jobs, it is also important that organizations observe employees and attempt to coach them on improving their ethical consciousness. Different organizations may have to experiment to find how best to do this; some may benefit from holding training sessions, while others may prefer to have managers lead by example.
2. Hold an internal perception audit – It is typically important for organizations to have a sense of what their employees think about their executives. Such information not only can help them improve executive behavior; it also reveals the values that employees find important. A perception audit can help executives anticipate morale issues and identify risky behavior before any information reaches the public.
3. Emphasize personal leadership – While it is important for organizations to emphasize overall ethical policy, lasting changes are often brought about by having inspirational leaders. If employees see their managers behaving poorly, no amount of ethical prescription will likely improve their feelings toward the company.
4. Explore alternative frameworks – Organizations should experiment to find an approach to ethical conduct that works for them. While there are frameworks in place to help them do this, such as the Beauchamp and Childress framework, CSR is not one-size-fits-all.
5. Empower ethics advocates – All employees have a responsibility to pursue ethical behavior to a degree. That said, CM professionals are well placed to take positions of responsibility as organizational ethics advocates. By helping organizations choose contracts that are ethically sound, CM professionals ensure that companies are only engaging in relationships that help the company image. It is important that such professionals have the power necessary to act when ethically sound contracts become available.

Implement Change with CSR

While some degree of unethical behavior may always exist in the workplace, the CSR movement is helping organizations make significant changes. As consumers, we should continue to demand ethical business practices by our companies in the hope that such demands will inspire change. There are, however, still many steps to be taken.

Organizations should continue to experiment with CSR to find the best way to implement ethical improvements in the workplace. CM professionals are uniquely positioned to spearhead this change.