Abstract
Proper contract management is crucial to the success of order and project management. In this article the aims, content and methods of contract management will be shown from the supplier’s viewpoint. The article follows the course of the project over time and identifies the four phases of contract management: the drawing up of the bid, negotiation, execution, and analysis. The contract management function faces specific challenges in each phase. Drawing the bid up primarily involves translating the business model into a contractually meaningful form. In the negotiations the practicability and profitability of the business model must be safeguarded. The execution phase primarily involves securing and increasing profitability. Finally, the analysis enables “lessons learned” to be established for future business operations. This chapter puts forward strategies for mastering these challenges. Thus the aim is to show what has to happen on a contractual level in order to make the project contract a success.
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Notes
- 1.
As shown above by the example of the EPC contract, this applies both to explicit duties and also to those which are only implicit. However this statement does not of course apply to duties which already oblige the parties by law. The supplier of a power station is therefore of course already legally obliged to adhere to the locally applicable environmental and occupational health and safety rules and regulations.
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Exercises
Exercises
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1.
What arguments are there for and against consulting external lawyers during the process of drawing up the bid?
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2.
Give reasons why open communication is necessary in the negotiation phase in order to bring about win-win solutions.
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3.
Explain how it is that opportunities to create value also exist in supposed win-lose situations.
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4.
Describe how the negotiating of what is planned tends to lead to the creation of value for both sides, whereas the negotiating of “The Unplanned” tends to have a value-distributing effect.
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5.
What is meant by the negotiator’s dilemma?
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6.
Describe the hazard posed by the loyalty problem which can arise due to the splitting up of the negotiating team into sub-groups. How can this danger be averted?
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7.
Explain what is meant by the “battle of the forms” in connection with the coming into being of a contract.
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8.
What is laid down in the conditions precedent? What in particular must be given due attention in this regard?
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9.
Under what circumstances in claim management does it make sense to refrain from taking court proceedings that are likely to be successful?
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10.
What are the basic procedures for resolving conflicts that are available to the parties to the contract? According to what criteria should they be selected?
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11.
State what the main tasks and aims of claim management are.
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Berkel, G. (2016). Contract Management. In: Kleinaltenkamp, M., Plinke, W., Geiger, I. (eds) Business Project Management and Marketing. Springer Texts in Business and Economics. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-48507-1_5
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DOI: https://doi.org/10.1007/978-3-662-48507-1_5
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