Contract Life Cycle Management Definition
The contract life cycle management definition is the process of managing the entire life cycle of a contract from initiation to execution to close-out. The purpose of this process is to ensure that contracts are managed effectively and efficiently in order to deliver maximum value to the organization.
There are four key phases in the contract life cycle:
1) Contract Initiation: This is the phase where the contract is created and includes all activities from identification of the need for a contract, through solicitation and selection of vendors, to negotiation and award of the contract.
2) Contract Execution: This phase begins when the contract is awarded and includes all activities necessary to implement and administer the contract. These activities may include performance monitoring, payments, changes/modifications, and close-out.
3) Contract Close-Out: This phase occurs at the end of the contract term and includes all activities necessary to complete the contractual obligations, such as final performance evaluations, settlement of claims/disputes, and archiving of records.
4) Contract Renewal/Extension: This optional phase occurs if there is a need to extend or renew the contract and includes all activities from identification of the need through solicitation, negotiation, and award.
