Procurement Contract Management Definition
Procurement contract management includes all activities related to the acquisition of goods and services from external suppliers. It encompasses the entire lifecycle of a contract, from sourcing and supplier selection through to performance management and contract close-out.
An effective procurement contract management process is critical to ensuring that an organization gets the best value for money from its suppliers. It helps to ensure that contracts are fit for purpose, that supplier performance meets expectations, and that risks are managed effectively.
The key elements of an effective procurement contract management process include:
Sourcing and supplier selection: Ensuring that the right suppliers are selected for the required goods or services. This includes defining requirements, identifying potential suppliers, evaluating proposals, and selecting the supplier that offers the best value for money.
Contract negotiation: Negotiating terms and conditions with the chosen supplier that are favourable to the buyer. This includes agreeing on pricing, delivery schedules, quality standards, and other contractual terms.
Contract execution: Managing the contract once it has been signed by both parties. This includes monitoring supplier performance against agreed targets, managing changes to the scope of work, and dealing with any issues that arise during the course of the contract.
