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How To Ensure The Right Contract Is In Place

The contract planning and management process that takes place before a contract is awarded is critical. Ultimately, the success of the contract's lifecycle is contingent upon common understanding and agreements made during negotiation and the language that makes its way into the document. A failure to understand the language and the stipulations placed in the contract — which can happen if proper steps and precautions aren't taken during its construction — can result in several problems during the life of the agreement.

If you set unrealistic expectations in the contract or are uncomfortable with some of the language, you are operating under the "wrong contract." To ensure the right contract is in place — one that both sides agree with and will result in a positive experience for all parties — you must make the right decisions before it is signed and awarded. Here are a few components of a contract that should be considered to make sure it works for you:

A definition of what is to be provided and requirements to be met.

This is standard information. What will the parties receive in the agreement? This needs to be clearly defined in order to make sure there are no surprises to either party and that everyone receives what they expect.

An agreed level of service and a consequence if not met

Not only do both sides have to agree on the transaction of goods and services, they have to agree on any potential penalties or accommodations, should one fail to perform to the standards set in the contract.

A means to measure performance

It's one thing to specify that performance requirements must be met, but to make this happen, there must be a mechanism in place to measure that performance. If a particular party is obligated to complete a certain task, the obligee needs to be able to determine if that task is complete to the agreed upon standard. This information can and should be included in the contract.

A plan to cover implementation/transition/rollout

A rocky start to a contractual agreement can set a negative tone for the duration of a contract. During its construction, both sides should ensure there is a solid plan in place that defines implementation and rollout.

Making sure these important components are in place can be achieved if you properly communicate with the other parties bounded to the contract during its negotiation. Using a contract lifecycle management (CLM) solution that keeps everyone abreast of all contract obligaitons and deadlines can help ensure everyone is on the same page, that nothing is missed or overlooked ,and and ultimately that the right contract is put in place to the benefit of all parties.