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Articles in category: Contract Management
Procurement is not officially in charge of quality control in most manufacturing companies. Still, when a supplier - whether a contractor or a parts supplier - falls down on the job, that’s certainly something for procurement to address
In the last several months, there have been numerous reports in the media about problems with parts or workmanship on products ranging from aircraft to electronic components to public infrastructure.
Despite having formal procurement processes, some organizations have staff members who engage in maverick purchasing—circumventing standard procedures to procure items individually. According to APQC’s Open Standards Benchmarking in procurement, bottom-performing organizations have maverick purchasing worth 10 percent or more of their total annual procurement value. For top-performing organizations, maverick purchasing represents only 0.24 percent of their total annual procurement value.(Read Full Article)
In 89% of major corporations, contract and commercial management are gaining increased focus and importance as strategic enablers of the business. This was the topic that Rigard Geyser, Southern Africa Representative of The International Association for Contract & Commercial Management (IACCM), expanded on in his Keynote Address at the recent 3rd Annual Contract Management Seminar + Workshop 2013 held in Johannesburg.(Read Full Article)
An average of 30 to 35 per cent of a firm’s contracts are “not fit for purpose” because of a lack of correct goals and responsibility from the parties. That’s the finding from new joint research by the International Association for Contract & Commercial Management (IACCM) and the National Audit Office. The results were revealed at the Scottish Government’s ninth National Public Procurement Conference in Glasgow on Tuesday.
However, respondents to the survey were clear on what they wanted from a contract. They noted that it is very important for a contract to define “clear mutually understood objectives ...(Read Full Article)
Contract management sometimes gets short shrift in discussions of where procurement adds value. It’s assumed by many in an organization - including, unfortunately, some in the procurement function - that reducing to writing the results of a negotiation on pricing, terms, conditions, product or service delivery, and other details is enough, that once officially encapsulated in a formal contract document all details are settled and things will proceed from there smoothly.
In a 2012 survey of its members, the International Association for Contract & Commercial Management (IACCM) identified that the average cost of poor contracting is 9.2% of a firm’s annual revenue. For large, capital project industries such as oil and gas it is even higher – almost 15%.(Read Full Article)
-->What is success in contracting? To answer that question, we need to remember that not all relationships are alike, or of equal importance, and we should treat each in a way that is appropriate to its degree of criticality to our business and organisation.(Read Full Article)
Think locking in long contracts in anticipation of rising prices makes logical sense? You might be in the minority. Procurement Leaders is about to publish its Category Planning Guide, which overviews all indirect categories in 2014. Interestingly, we find that the higher the expected price, the shorter the contracts.
Contract compliance is the ability of an organisation to insure purchase order detail accurately reflects the terms and conditions as are found in the contract detail of long term agreements (LTA’s). The reasons for entering into LTA’s with suppliers are many. LTA’s are often used for securing supply of a scarce resource from a supplier. LTA’s are also used to group a large number of common items (Commodity/Category) together to obtain purchasing leverage and thereby obtain preferential pricing over the term of the contract. LTA also facilitate closer and more stable relationships within the supply ...(Read Full Article)
The 2011 BC case of Metercor Inc. v. Kamloops shows a different way for a disgruntled bidder to challenge a procurement decision that has gone against them. In this case, the City of Kamloops issued a request for proposals for the installation of water meters.
The unsuccessful proponent (CMI) brought an action for judicial review of the City's decision to enter into negotiations with the successful proponent (Neptune). The RFP set out a two-stage evaluation process. Proposals were first scored for their technical merits and only those proposals that scored at least 75% on this basis (56.25 marks ...(Read Full Article)
The brewer undertook the integration of a new solution following the launch of a strategic initiative to reduce supply cost volatility caused by price fluctuations in commodities such as barley, wheat, maize, diesel fuel, natural gas, bunker fuel, and aluminium. The solution, developed by Triple Point Technology, Commodity XL Strategic Planning and Procurement (SPP), was selected by the brewer, the company has stated, because of its ability to provide real-time scenario analysis to reduce commodity price risk, decrease overall commodity expenditure and because it can be integrated with SAP financial, logistics, inventory, and invoicing solutions.(Read Full Article)
I wonder how many of you have come across Glassdoor; a website where potential employees can identify a particular organisation, the typical salaries paid to their varying levels of staff, what questions were asked in interviews, others experience of the recruitment process and what those who were successful in the selection process subsequently thought about working for the organisation. Some really interesting insights and all free of charge.(Read Full Article)
The rise in contract management and the outsourcing of goods and services has created an increase in procurement fraud. Here are 12 red flags that can help you save millions.
Repeated awards to the same entity, Competitive bidder complaints and protests.......................
A common failing in many organizations is the lack of a clear senior owner for contract management, often true at both the individual contract level and across the overall picture. It is a truism that initiatives and activities rarely succeed without senior sponsorship and ownership, and that is as relevant here as in any other business area.
And in terms of contract management, if the CPO does not own it, who will? Usually the answer is nobody. The legal department or general counsel may have an interest, but in our experience they only get really interested in the latter stages ...(Read Full Article)
Congrats on landing the big customer! After all the hard work, all-nighters, uncertainty and setbacks, you’re finally experiencing the sweet success of claiming big brand name customers as yours. You can’t wait to work with them, be able to mention them as client, leverage that success and, of course, get paid.
But all that excitement comes to a screeching halt when you get the 20- or 30-page agreement from that big customer asking you to sign your company’s soul away.(Read Full Article)
Using technology to handle contract management can save 17 per cent and boost compliance with contract terms. Speaking at the CIPS Annual Conference 2012 Ioana Canescu, a contract management expert and former head of global contracts and business management at US telecoms firm Tellabs, said: “Technology will give you intelligence from the contracts and drive most value for your company.”(Read Full Article)
We're bigger fans of prose here than fancy-schmancy consulting graphics. Even though many of us have had past careers as consultants, sometimes we think that people use pictures to tell words because they'd rather hide behind visual takeaways and sto...(Read Full Article)
The cost of Eskom’s Ingula pumped storage scheme electricity project, one of its three biggest capital expenditure projects, had risen from R8.9bn to more than R23.8bn, the power utility said in a document sent to Business Day this week.
This represents a near tripling of the cost of the project from before it started.ost of Ingula pumped storage scheme electricity project rises from R8.9bn to more than R23.8bn(Read Full Article)
Investors and companies doing business in the member states of the European Union remain concerned about the consequences of one, some or all of the eurozone countries returning to their old national currencies.
According to law firms, which behind the scenes are beavering away feverishly on behalf of their clients to examine, and try to minimise, the consequences of a collapse of the euro, or the withdrawal from the European Monetary Union by a eurozone country.
Companies and investors party to contracts that require payment in euros or are denominated in euros should re-structure the deals to ensure that they ...(Read Full Article)
This comprehensive guide aims to provide a ‘cradle to grave’ approach to contracting, highlighting the dos and don’ts.
It is aimed at contract managers, but remains neutral on which area performs the relevant tasks to allow for each organisation’s approach to contract management.
The guide provides a chapter on technology terms and conditions, demystifying this category. The real-life examples and case studies of both best practice and poor contract management are particularly useful.
By IACCMVan Haren Publishing, £54.99(Read Full Article)
Many companies partner with specialized advisors to lead them through the outsourcing process, including RFP development, service provider selection, contract negotiation and governance design. These advisors have in-depth knowledge of the outsourcing market, understand the inherent business risks and can recommend specific business terms to guide their clients through a successful contracting process..(Read Full Article)
If you read the media and analyst headlines surrounding services procurement, it appears that statement-of-work (SOW) and project-based services spending program management has done more than capture the imagination of the profession -- it has become an all consuming focus for some.(Read Full Article)
Cross-border commerce is booming and for those companies trading globally, international partnerships are key. Contracts are often comprised of a complex web of local agreements in an attempt to accommodate diverse legal, regulatory and commercial environments. The length of time required to negotiate or amend a global contract may take months, years or it may not happen at all.(Read Full Article)
Despite cost benefits strategic sourcing delivers, procurement still is under increasing pressure to find new ways to create savings, says Constantine Limberakis, Senior Research Analyst, Global Supply Management, at Aberdeen Group.(Read Full Article)