Contract Administration (1)

8/4/2019 Contract Administration (1)

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Contract Administration:

Contract management or contract administration is the management of

contracts made with customers, vendors, partners, or employees. Contract

management includes negotiating the terms and conditions in contracts and

ensuring compliance with the terms and conditions, as well as documenting and

agreeing on any changes that may arise during its implementation or execution. It

can be summarized as the process of systematically and efficiently managing

contract creation, execution, and analysis for the purpose of maximizing financial

and operational performance and minimizing risk.

Responsibilities include:

• Contracts (various: including formal, short form, and annual contracts)—

Drafting, Evaluation, Negotiation and Execution:

Non Disclosure Agreements, Sales / Purchasing Agreements,Sub-contracts, Consulting Agreements, Licensing Agreements,

Master Agreements, review of customer proposed terms and

conditions

Distribution Agreements (resellers, agents, joint marketing etc.)

Commercial and Public (Federal, State and Local Municipalities)

Contracting

• Serve as the point of contact for customers on contractual matters. Act

as contractual “middleman” between company employees and

customers, ensuring timely review and approval / reconciliation of

variations.

• On all standard and nonstandard contracts, provide redlinedrecommendations and often negotiate directly with customer attorneys

or purchasing staff until consensus has been reached

• Maintain contractual records and documentation such as receipt and

control of all contract correspondence, customer contact information

sheets, contractual changes, status reports and other documents for all

projects.

• As needed, provide guidance on contract matters to project managers or

other operational staff, including training to new project managers and

other employees in contracting practices and procedures.

• Develop and implement procedures for contract management and

administration in compliance with company policy. As appropriate,contribute to or influence company policies.

• Monitor compliance by company employees with established procedures.

Identify areas of recurrent pressure.

• Work with Risk Management Department / Finance to coordinate

contractual insurance requirements.



• Work with Finance to ensure adherence to broader finance and risk

requirements such as revenue recognition, pricing and discounting

policies,, export controls etc. May include ‘financial engineering’ and

understanding / evaluating economic impact of terms and term options.

• Support Product Management / Marketing to ensure company products

and services are offered with appropriate, competitive terms andconditions

• Monitor competitive terms. Monitor customer satisfaction with our terms

and conditions and contracting practices. Recommend changes.

• Ensure that signed contracts are communicated to all relevant parties to

provide contract visibility and awareness, interpretation to support

implementation.

• Handle on-going issue and change management

• Monitor transaction compliance (milestones, deliverables, invoicing etc.)

• Oversee Service Level Agreement Compliance

• Ensure contract close-out, extension or renewal.



The Importance of Contract Administration:

Contracts management is becoming an increasingly important for companies with diverse

business interests and global reach. Integrating operational processes and aligning resources for maximum efficiency requires a proactive approach to managing all aspects of the companies’

contractual obligations. Whether your managing short term employees, organizing supplying

chain management or structuring your procurement requirements, managing the contracts

process to minimize risk and maximize productive value is essential to a company’s bottom line.

Establishing the contractual obligations of both parties is the first and foremost requirement of

any contractual framework. This should include the articulation of the terms and conditions in a

clear and precise format that both parties can understand. If the contract is complex in nature,including a section on dispute resolution guidelines can provide recourse for both parties in the

event that either party fails to fulfill its obligations.

Implementing a seamless contracts administration process helps to organize resources and

provides a framework that assists the monitoring, reporting and management of the contracts process. This includes the establishing of an archiving facility for document reference and

administration software for the ongoing maintenance and management of contracts. When itcomes to streamlining processes and cost accounting having contracts software setup to runreporting allows you to extract key information that's important to the decision making process.

Systematic reporting can help you reduce costs, increase productive efficiency and generate the

necessary accounting requirements for the end of the financial year.

Companies that are implementing a contracts management process need to tailor a solution tomeet their company structural requirements. Hiring outside consultants to provide valuable

strategic advice and feedback can help guide an organization to avoid many of the traps and

pitfalls that can befall the uninitiated. In today's competitive business environment it's importantto manage operations efficiently. Having a streamlined and effective contracts management

process can add significant value to a company’s operational process.

Contract Planning:



•Identification of need

•Development of a business case

•Planning purchase•Risk assessment, analysis, and management.

•Risk management strategies

Procurement Cycle:



Vendor Selection



Nine Steps to Proposal Development

Step One: Understand the Problem

Exercise: Brainstorm, conceptualize, plan, modify, and organize your thoughts and

data in preparation for writing the proposal.

1. What is the need/problem that requires action?

2. What are the client’s circumstances or conditions that necessitate intervention?

3. Why is this a need/problem? List some of the root causes and contributing

factors:

A.

B.

C.

4. Who is experiencing the need/problem? Describe the individuals who experience

the problem.

5. What is the impact of the problem in the community and on society?



6. What will be the impact if there is no (additional) intervention to affect the

need/problem?



Step Two: Brainstorming Solutions

Exercise: List all the possible solutions. Be imaginative and idealistic. Do not limityour brainstorming. For each solution, state why you feel this is a sound idea

(rationale) and what major difficulties you might expect to encounter if the solution

is implemented.

Solution 1.

Rationale:

Major Difficulty:

Solution 2.

Rationale:

Major Difficulty

Solution 3.



Rationale:

Major Difficulty:



Step Three: Working Through Solutions

Exercise: List the solution on which you will focus and provide a 2-3 sentencerationale for your selection. Continue to fill out the worksheet to think the solution

through.

Proposed Solution:

Rationale:

1. What will be the geographical area of service?

2. Who will be the primary recipients (targets) for service? What are theirdemographic characteristics (ethnicity, number, socio-economic status, age,

gender, etc.)?

3. Will there be others who benefit from this service (intended and unintended

beneficiaries of service)?

4. Is the primary population to be served easily accessible or will there be a need

for special outreach activities?



5. Is the proposal idea sensitive to the cultural, gender, religious norms, and values

of the clients? Explain:

6. Will the community have to be educated about the problem? What supportive

role might the community play? How easily can they become involved?

7. What types of services/programs have already been established in the

community for the target group(s)? What are the gaps in service? Be specific,

include name of agency, and nature of the current program. What evidence exists

that there is a need for the proposed new service?

8. Why is the proposed project a good return on public and/or private dollars?

Justify your answer.



Step Four: Results/Benefits of the Solution

Exercise: What results or benefits do you expect if the solution is implemented? In

other words, what changes are expected to occur? Describe the change expected

in clients in terms of:

1. Change in knowledge:

2. Change in attitudes or beliefs:

3. Acquisition of skills:

4. Change in behavior:



5. Change in the physical, economic, or social conditions:

6. Will there be a single effect as an outcome or will there be multiple changes in

different groups?

Step Five: Determine Tasks to Accomplish Solutions

Solution/Proposal Idea:___________________________________________________________

Exercise: List the major tasks or implementation activities needed to accomplish

the solution (include project start-up activities as well), and the job classification of

the individual needed to accomplish the task).



Major Activities/Tasks Responsible

Person



Step Six: Estimate Resources

Exercise: Identify the personnel and operating expenses you will need to

accomplish the tasks. Specifically list the staff salaries, benefits, costs for facility,

equipment, travel, printing, transportation, utilities, staff training, copier, fax,

phone, maintenance, office supplies, etc.

Personnel Percent

Time

Monthly Yearly



TOTAL

Operating Expenses Monthly Yearly



TOTAL

Step Seven: Reassess Solutions

Exercise: Reassess your project idea(s) in light of the resources needed to

determine if it is cost effective.

Total Cost of Project = __________$ per person

Number of Clients Served

Does this number seem realistic to you? Is it a “good value for the dollar?”

How might you modify the project to make it more cost effective?



Step Eight: Reassess the Expected Benefits to Clients

Exercise: Restate the expected outcome for the project and brainstorm this

further.



1. Will the proposed benefits to the clients really address the needs/problem and

lead to the needed change? Are there other benefits or outcomes that might beadded to the project to further insure success?

2. Can outcomes be identified for each of the target groups? Both primary and

secondary beneficiaries of services?



Step Nine: Identify Measurements of Outcomes

Exercise: List each expected benefit and identify the criteria and data collectionmethods to be used.

Expected Benefit Outcome Criteria and

Measurements

Sample: Client knowledge change will lead to

behavioral change

Pre-post testing of knowledge

change. Pre-post testing of client

behavior inventory using the

Behavioral Rating Index



Contract negotiation is a key activity that frequently fails to receive

the preparation or attention it deserves. This very important step inthe purchase and implementation of any technology solution isoften treated as its own activity, separate from both the selection andimplementation phases. This disparate approach does not sufficientlyacknowledge the need for buy-in and support from the implementationteam. It also does not consistently ensure the agreement is based on thecritical areas identified by the selection process, and usually fails to contributeto the relationship-building begun during the selection phase.Instead of being treated as entirely separate activities completed byunique teams, the negotiation is best managed as an integrated part of theprocess. After all, it is the piece that bridges the selection and implementationactivities, and it affects how your organization will work with theselected vendor for years.As part of the selection process, the organization should have identifiedwhether it wants to just work with its vendor or be in partnership with thevendor. The key differences between these relationships are how the partiesare expected to work together and whether there is vested interest in thesuccess of the respective partner entity.

The organization also needs to define what is needed and desired fromthe vendor as part of the relationship—not only today, but also in thelong term. There is an increasing expectation that a vendor should be apartner and not just a service provider. In those cases, the negotiationprocess is no longer simply about getting the best price and dotting thelast “i,” but is about negotiating an agreement that provides long-term successfor all parties. With the proliferation of startup and smaller vendors,too many tightly negotiated deals could jeopardize the stability of thevendor and its ability to provide enhancements over the longer term oreven to stay in business.

One of the preliminary steps for the negotiation process is to identifythe negotiation team. Many organizations use a “one-size-fits-all”approach, where a contract or vendor-management group steps in to takeresponsibility for the negotiation process.

This method can be impersonal and ineffective by treating everynegotiation the same, without taking into account whether this entity isa vendor or a partner. Individuals familiar with this approach advise cautionwhen utilizing the services of a contract group to negotiate a partnershipvs. a vendor relationship.Lew Semones, chief financial officer of Senderra Funding LLC, Charlotte,North Carolina, says, “[Contract] groups are tasked with beating the vendordown; there is no opportunity to build a relationship, nothing to work onor base the relationship on going forward. The contract group is not vested

in the ultimate solution.”It is recommended that the organization be represented by only one totwo people during the actual negotiations, with additional support andinvolvement of the selection and implementation teams taking place behindthe scenes. Selection-team members contribute insight about the criticaldecision criteria used in the selection of this vendor and any promises made,while the implementation team members—such as the project manager andbusiness leads—are involved. This ensures they understand and are on boardwith the terms being set. The involvement of these team members is particularly



crucial when any customizations or enhancements are being requestedas part of the agreement.As the vendor selection is based on information and assurances providedduring the selection process, should any of the information not be accurateor expected functionality not be available, the team might have selecteda different system. Therefore, the contract agreement should ensure the

organization is protected and that any promises made or information providedshould be a part of the final contract. This is usually done by attachingto the final contract the request for proposal (RFP) response collectedfrom the vendor during the selection process.If an RFP process was not used, the critical functionality required fromthe application and reviewed in talks with the vendor should be documentedin writing as part of the agreement. Semones prefers the latter approach.“It’s important to identify the five or six essential items you need from theapplication for the agreement,” he says. “You can work through the rest thebest you can as part of developing the relationship.”Some areas we have found that deserve careful attention during negotiationsinclude:● Determination of what, if any, costs are associated with adding orreducing the number of users or transactions, and the subsequent impact onmaintenance fees.● The costs associated with accepting new bug fixes, releases and versionsfrom the vendors, and the services and support included with maintenanceand any activities that can incur additional costs.● The terms or service-level agreements providing the organization withtimely and appropriate responses in case of system issues or downtime.● The types of ongoing training services available to the technicaland/or business personnel.● Whether the agreement is based ontransaction fees, and any price reductionsthat can be expected as volumes increase, aswell as determination of any minimum feelevels.● The impact of any merger or acquisitionon the agreement and fee basis.In cases where the application will be customizedby the vendor, the organization orboth parties, additional factors need to beconsidered during the negotiation. Theseinclude:● Who will be completing the enhancements?● What i s t h e scope of work andtimetable for delivery?● Who has responsibility for which componentsduring the enhancement deliveryprocess? What are the parameters for acceptability

of the enhancements (testing criteria orother)? How will the enhancements be handledas subsequent versions and releases areprovided?● Does the vendor guarantee backwardcompat i b i l i t y, o r a re additional costsincurred with each release to re-apply thecustomization?



● Does the vendor support the organization while investigating issues with a new releasewhere customizations were developed?● Are there areas of the application thatmay be customized by the organization, andothers that require vendor support or do notpermit customizations?

● What success factors are used for anycustomization being requested of the vendor,time frame, functionality, etc.?Although partnership is the key word, it isstill important to have some leverage in thenegotiation process. As Semones notes, “Thevendor needs to know you have legitimatechoices, [and are] not just playing themagainst each other. Keep two or three vendorsinvolved when going through thenegotiation process. If you just negotiatewith one vendor, don’t think they don’tknow that, too.”

Contract Negotiation Mistakes

Ten Mistakes to Avoid In The Contract Negotiation Process

The smallest mistake can kill an otherwise productive contract negotiation process. Avoid thesecontract negotiation mistakes so that you and your vendor will come to an agreement that will benefitboth parties.

1. Thinking The Yard is Fenced InDon't assume that only a certain subset of resources or conditions can be negotiated. The sky is thelimit and finding creative and original alternatives that can benefit both parties will result in a better

negotiated contract. Do not propose ridiculous or insulting alternatives that will destroy your sincerityand integrity.

2. Failure to Study Your OpponentToo many people approach contract negotiation process with the "It's all about me!" mentality. Theyfail to research the vendor that they will be negotiating with. They don’t understand the vendor'smarket and what other influences control their environment. The larger the contract, the more timeyou should spend on this.

3. Too Aggressive

You need to be certain that your company's interests are at the forefront of your priorities but at thesame time you need to be mindful and sensitive regarding the person representing the vendor. Going"on the attack" will only succeed in raising his/her defensive mechanisms and negotiations will turnout to be fruitless.

4. It's All About PriceOf course nobody wants to pay too much for their goods and services, but there is a lot more on thetable than just money. Look for alternatives that are high on your priority list and low on the vendors.Then you both win.

5. Jumping Too QuickNo matter how low the opening price is, offer lower or ask for something more. If you jump tooquickly at the first offer, the vendor will feel like they made a stupid mistake. You want the vendor toleave the negotiation table feeling good.



6. Don't GloatWhen you do end up striking a fantastic deal in your favor, don't embarrass the vendor by sayingsomething that will give you an ego-trip at his/her expense. Not only is this unprofessional, but thevendor may then look for loop-holes in the contract to regain some money and pride.

7. Terminology Not Defined or Understood

Don't assume that everyone who will read the contract will understand every technical term orcomplicated provision. Insist that every area of the contract that has the possibility of beingmisunderstood is clearly defined.

8. Inconsistencies Within the ContractLook for inconsistencies within the contract that can come back to haunt you in some form of arbitration. If necessary, have a third party review the contract in order to uncover anyinconsistencies.

9. Concern in One Area Will be Overridden by Another AreaDo not assume that a perceived weakness or apprehension in one area of the contract can becompensated by strength in another area. Be specific and direct in all areas. Once the contract iscontested in a court of law, all control is removed from your hands.

10. Avoid RedundanciesStating the same thing twice in different section of the contract will not reinforce their value. In mostinstances lawyers and the courts will come up with a reason to differentiate and justify both areas;usually with an interpretation that neither party anticipated.

Contract negotiation process

Any kind of research collaboration, including confidential discussions with another party,

exchange of materials, or any other research related activity, may require a contract to be put in

place before the collaboration begins. All negotiations with a funder or another party should bemanaged and coordinated by the Faculty Research Services contract manager (or equivalent),

who is the main point of contact for matters relating to the contract.

Discussion between the Principal Investigator and Contract Negotiators regarding the risks and

benefits associated with the activity is essential at an early stage to help expedite the process and

bring swifter agreement. Delays most often occur when insufficient information is gathered andthere is a poor understanding of what each party to the contract is trying to achieve.

The negotiation process is not necessarily linear and differing factors will affect the precise routeof negotiations as well as the final agreement, however, negotiations undertaken by the College

will always attempt to establish an equitable position that is both proportionate, and appropriate

to the activity at hand.



• The contractual terms will be assessed in accordance with the CollegePreferred Terms of Trade whilst taking full account of any informationprovided to Faculty Research Services / Faculty Research Contracts.Wherever possible, a proportionate approach will be taken to negotiation.Where terms are outside of those preferred, the contract negotiation will seekapproval from the relevant College Authority, such approval will be

considered on the merits of the activity, value etc.• Often a funder will wish to use their own template agreement, which will

contain those terms most beneficial to the funder, but may also contain onesdetrimental to the College. Whilst the College does work with and acceptfunder supplied agreements, we prefer to work from our own set of standardtemplates (some nationally agreed), the use of which will expedite thenegotiation process.

• Agreements will be reviewed holistically to establish the key benefits andrisks (if any). Onerous terms and any constraints on the research whichpresent a risk will be negotiated by the Contract Negotiator to limit exposurewherever possible.

• See Approval and Authorisation for guidance on approval requirements and

details of authorised signatories.

Typically negotiations tend to focus on a few key areas, examples of which are:

Intellectual Property (IP)

Often the most contentious issue in an agreement, the College will always try to ensure the rights

of the individual academic are protected with regard to future use of IP, and that any commercial

benefit to be derived from the IP favours the College. Care will always be taken to balance anycommercial advantage against the academic benefits of carrying out an activity, in achieving the

best and most equitable deal possible for the College, and the individual academic.

Successful commercial exploitation will benefit inventors through the College’s Reward to

Inventors scheme.

Publication rights

The cornerstone of academic research is the right to publicly disseminate the outcomes of the

research. Whilst on occasion there may be good reason to delay or restrict publication (e.g.

confidentiality, the patenting process, or arrangements with collaborators), the College alwaysseeks to protect this fundamental right in its research agreements. This right to publish is also

linked to the College’s academic mission and how it classifies its research activity. Any onerous

restrictions need to be carefully considered, both from an academic perspective but also whether the activity itself may be defined as research.

For further information on the most beneficial position for the College please see Key

contractual terms and preferred terms of trade.

Information required from the Principal Investigator

http://www.imperial.ac.uk/workspace/researchservices/Internal/Summary%20Guidance%20for%20Academics%20-%20Preferred%20Terms%20of%20Trade.pdf

http://www3.imperial.ac.uk/researchsupport/preparingaproposal/approvalauthorisationandsubmission#authorisedsignatories

http://www.imperial.ac.uk/workspace/researchservices/Internal/Reward%20to%20Inventors%20Scheme%20Imperial%20log%20in%20only.pdf



http://www.imperial.ac.uk/workspace/researchservices/Public/Summary%20Guidance%20for%20Academics%20-%20Definition%20of%20Research.pdf


http://www.imperial.ac.uk/workspace/researchservices/Internal/Summary%20Guidance%20for%20Academics%20-%20Preferred%20Terms%20of%20Trade.pdf

http://www3.imperial.ac.uk/researchsupport/preparingaproposal/approvalauthorisationandsubmission#authorisedsignatories






The following areas should be considered in consultation with the Faculty Contract Negotiators

at the earliest opportunity. This will help inform the negotiation position for the College and may

help enable swift agreement with the other party or parties. Key information includes:

• Who the Funder is•

What stage any discussions are at and what has been provided to the Funder,or may have been agreed in principle to date.• Details of the Research activity itself including:

o Who developed the proposalo The scope of work

(i) What the work will entail, and whether it is large scale work

(ii) Who will be doing what

(iii) Whether the work is part of a long term research strategy

• The location of worko Where will work be carried out, i.e. whether this is on College

premises, at the Funder’s premises, elsewhere• Share of work

o Whether the project is collaborative, and if so who else may beinvolved and what their participation might be

• What relationship (if any) does the work have with similar projects takingplace, or those that are due to take place in the Department or elsewhere inthe College?

• Fundingo

Whether the Funder has indicated a budget limito The cost / price of the activity (if known at this stage)o Whether there are any other parties providing funding, materials or

otherwise• Intellectual property (IP)

o Whether the work relies on College owned Background IPo Whether any third party owned background IP or materials may be

requiredo Whether novel or commercially viable IP is likely to arise

• Clinical Researcho Whether there is any clinical activity associated with the project, ie.

does it involve humans subjects, their tissues and/or data - for further

information contact the Joint Research Office o Whether there are any non-clinical ethical considerations

http://www1.imperial.ac.uk/medicine/about/contacts/researchsupport/

http://www1.imperial.ac.uk/medicine/about/contacts/researchsupport/



Competitive Negotiation:ProcedureSummaryThis chapter provides an overview of the procedure for procuring goods

and services using the competitive negotiation procedure. Thecompetitive negotiation procedure is permitted for the procurement of goods and services other than professional services (“nonprofessionalservices”) if the cost of the goods or services is expected to exceed$50,000, and it is determined in advance that the competitive sealedbidding procedure is either not practicable or not fiscally advantageous tothe public. The competitive negotiation procedure is required for theprocurement of professional services if the cost of the services is expectedto exceed $30,000.Essential Information in this Chapter The three key procedural steps in the competitive negotiation procedure are:

Preparation of the request for proposals: The preparation of a request for proposals (“RFP”),which states in general terms that which is sought to be procured, specifies the factors whichwill be used in evaluating any proposal, including any unique capabilities or qualifications whichwill be required of the vendor, and contains or incorporates by reference other applicablecontractual terms and conditions. Issuance and public notice of the RFP: The public notice of the RFP is given at least ten daysprior to the date set for the receipt of the proposals by posting the notice in a public area, or publishing the notice in a newspaper of general circulation, or both. The purchasing agent alsomay solicit proposals directly using the County’s "offeror list," which includes businessesselected from a list made available by the Department of Minority Business Enterprise. Negotiation and award: The purchasing agent or the selection committee negotiates withvendors who are determined to be qualified, responsible and suitable. The negotiationprocedure for the procurement of goods and nonprofessional services is different from that for

the procurement of professional services.Key References to the Code of Virginia Applicable to this Chapter Section 2.2-4361: Definitions of competitive negotiation and other key termsSection 2.2-4303(A):When competitive negotiation required, generallySection 2.2-4303(C): Availability in lieu of competitive sealed bidding, generallySection 2.2-4303(C)(1): Availability in lieu of competitive sealed bidding, insuranceSection 2.2-4303(C)(2): Availability in lieu of competitive sealed bidding, construction

11-1 GeneralThe competitive negotiation procedure for goods and nonprofessional servicesmay be used if the cost of the goods or services is expected to exceed $50,000and competitive sealed bidding is determined by the purchasing agent to beeither not practicable, such as when cost is not the most important issue, when

11-2specifications are difficult to draft, or when the competitive sealed biddingprocedure is not fiscally advantageous to the public. The procedure to determinewhether the competitive sealed bidding procedure is not practicable or not fiscallyadvantageous is discussed in section 4-8.The competitive negotiation procedure is required for the procurement of professional services if the cost of the services is expected to exceed $30,000.Table 11-1



The Fourteen Steps in the Competitive Negotiation Procedure1. Identify the goods or services to be procured2. Create the selection committee and prepare the request for proposals3. Establish the procurement schedule4. Compile a list of vendors5. Issue the request for proposals and provide public notice thereof

6. Conduct pre-proposal conferences or site visits, if warranted7. The submittal of proposals8. The receipt of proposals9. The evaluation of proposals10. Develop a list of vendors with whom to negotiate11. Arrange a tour of the site or the facility, if applicable12. Conduct negotiations13. Rank vendors of professional services14. Negotiate a contract

The remaining sections of this chapter are a step-by-step outline of thecompetitive negotiation procedure. The procedure to be used for a particular procurement may need to be modified to fit that procurement.11-2 Identify the Goods or Services to be Procured

The using department must identify the goods or services to be procured. It isimportant to develop a comprehensive definition of the goods or services to beprocured. Goods should be defined using the procedure identified in chapter 6.Services should be defined using the procedure identified in chapter 12.11-3 Create the Selection Committee and Prepare the Request for ProposalsA selection committee should be established, composed of competent individualswho are able to make an intelligent selection decision based on factualinformation. The three key roles of the selection committee are to assist indeveloping the request for proposals (“RFP”), evaluate the proposals andconduct interviews and negotiations with vendors.The RFP shall be prepared by the using department and the purchasing agent,

and then be reviewed by the selection committee. Before drafting a complexRFP, it is recommended that the using department prepare a work statement.The work statement should identify the required goods or services (broken down11-3by tasks) to be procured in a logical sequence, assist in establishing realisticmilestones or delivery schedules, and help determine supplier cost realism.Each task of the work statement should be coordinated with the RFP, and thenumerical coding of tasks in the work statement and task descriptions should beidentical or cross-referenced. The selection committee should critically reviewthe description of the goods or services to be procured and the evaluation criteriaand determine how, if at all, the evaluation criteria should be weighted.

The RFP should be as comprehensive as possible because the more complete itis, the better the chances are that the vendors will understand what the Countydesires to procure and what relevant experience and qualifications it shouldinclude in its response and highlight during discussions and negotiations.The RFP must, at a minimum: State in general terms the goods or services that will be procured. Specify the criteria that will be used to evaluate the proposals, includingany unique capabilities or qualifications that will be required of the vendor.



Contain or incorporate by reference the contractual terms and conditionsapplicable to the procurement.A comprehensive description of the elements of an RFP is set forth in chapter 12.11-4 Establish the Procurement ScheduleThe purchasing agent and the using department should establish a schedule that

will assure that the procurement is completed on or before the date the goods or services are required. To do so, the purchasing agent and the using departmentshould consult and determine the completion date and then identify themilestones and the dates by which each milestone should be achieved in order toassure that the procurement is timely completed. Seven to ten weeks should beallowed for the entire procurement process in order to allow proper planning andadministration at each step of the selection process.The key milestones and the minimum amount of time that should be allowed for each milestone are: Preparation of the RFP documents: Allow at least fifteen work days toprepare the RFP documents and issue a written RFP.

Public notice period and the date for receipt of proposals: Allow at leastten calendar days to provide public notice of the RFP prior to the date setfor the receipt of proposals. Evaluation of proposals, negotiation and issuance of notice of award:Allow at least fifteen work days to evaluate proposals, conduct interviewsand negotiations, and issue a notice of the award.11-4 Execution of contract: Allow at least ten work days to execute the contractafter the notice of award of the contract.The purchasing agent and the using department should allow more time at eachstage identified above for procurements of goods or services that are notcommonly procured by the County, procurements that are complex, andprocurements that require the vendors to submit substantial amounts of information for evaluation.11-5 Compile a List of VendorsThe purchasing agent and the using department should compile a list of vendorsfrom staff knowledge of local vendors and through directories and lists of vendors. The purchasing agent should send RFPs directly to these vendors, inaddition to the public notice of the RFP that will otherwise be provided.11-6 Issue the RFP and Provide Public Notice Thereof Public notice of an RFP shall be given as provided below: Manner of giving public notice: The purchasing agent shall provide publicnotice of an RFP by posting in a designated public area, or publication in anewspaper of general circulation, or both. In addition, the purchasingagent may solicit proposals directly from potential vendors, and shallinclude businesses selected from a list made available by the Departmentof Minority Business Enterprise. Public notice may also be published onthe Virginia Department of General Services’ central electronicprocurement website and other appropriate websites. Notice period: The public notice shall be given at least ten calendar days



prior to the date set for receipt of proposals. Contents of the notice: The notice shall contain, at a minimum, thefollowing information: (1) the name of the purchasing entity; (2) a brief description of the goods or services to be procured; (3) the date and timeset for receipt of proposals; (4) the requisite qualifications for vendors, if

applicable; (5) the date and time of the pre-proposals conference, if applicable; (6) the name of the purchasing agent; (7) the location whereRFP documents can be obtained; and (8) the legal authority for theprocurement.These are minimum requirements, and the purchasing agent may provide anyadditional notice that he deems appropriate.11-511-7 Conduct Pre-proposal Conferences or Site Visits, if WarrantedA pre-proposal conference is a meeting among the purchasing agent, theselection committee and prospective vendors during which the purchasing agentand the selection committee review the specifications or the work statement in

detail, explain the scope, objectives and techniques of the procurement,emphasize critical elements of the RFP, and encourage input from prospectivevendors. A site visit allows prospective vendors to observe physicalcharacteristics of the land or of structures that are relevant to the procurement. Apre-proposals conference and site visit are hereafter collectively referred to as a“pre-proposal conference.”A pre-proposal conference may resolve ambiguities, unforeseen andnonessential restrictiveness in the specifications or the work statement, or technical errors. The following are several principles that shall govern preproposalconferences and issues related thereto: When a pre-proposal conference should be held: Pre-proposalconferences may be particularly advisable when the County seeks toprocure goods that are highly technical or complex or for consultantservices contracts. Notice of the pre-proposal conference: If a pre-proposal conference isconducted, the public notice and the RFP must provide the time, date andlocation of the conference. The conference should be held as soon aspossible after the RFP is issued. Attendance at a pre-proposal conference: Attendance of prospectivevendors at pre-proposal conferences should be discretionary, notmandatory, in order to assure that qualified vendors who are unable toattend are not excluded from submitting a proposal. If attendance ismandatory, only those proposals from prospective vendors represented atthe pre-proposal conference shall be accepted. Oral representations at the pre-proposal conference: The purchasingagent should make a written note of all inquiries and points of contentionraised by the prospective vendors. Clarification may be provided at thepre-proposal conference so long as the specifications or conditions are notaltered. Oral representations made at the pre-proposal conference by thepurchasing agent or any member of the selection committee shall not be



binding on the County. All material clarifications of any provision of theRFP, or the amendment of a specification or condition of the RFP, shall bemade only be in writing as an addendum, as provided herein.These are minimum requirements. The purchasing agent may add anyadditional requirements to a pre-proposal conference that he deems appropriate.

11-8 The Submittal of Proposals11-6Proposals submitted shall comply with the following: Proposal in standard format: All proposals shall be in the formatprescribed by this manual, as set forth in chapter 12. Changes to the proposal: All erasures, interpolations, and other changesin a proposal shall be signed or initialed by an authorized representative of the vendor. Delivery of proposal: The purchasing agent shall not accept oral proposalsnor proposals received by telephone, fax, or other form of electronictransmission.

Deviations: Proposals containing conditions, omissions, erasures,alterations, or items not called for in the RFP may be rejected by theCounty as being incomplete. Proposal must be signed: A proposal must be signed by an authorizedrepresentative of the vendor in order to be considered. If the vendor is acorporation, the proposal must be submitted in the name of thecorporation, not the corporation's trade name. The vendor must indicatethe corporate title of the individual signing the proposal. Proposal must be submitted in sealed opaque envelope: A proposal andall other documents required to be submitted as part of the proposal shallbe enclosed in a sealed opaque envelope. Identification of proposal: The envelope containing the proposal should besealed and marked with the RFP number, the hour and date upon whichthe bid must be received and the vendor’s Virginia contractor registrationnumber (if required). If an envelope does not contain the proper identification, and it is inadvertently opened in advance of the prescribeddate and time for which the proposals are to be received, the purchasingagent should write an explanation of the inadvertent opening on theenvelope, with the RFP number, time and date of opening. The envelopeshould be resealed and deposited with the other proposals.11-711-9 The Receipt of ProposalsThe purchasing agent shall receive proposals according to the followingprocedure: Proposals must be timely received in purchasing office: All proposals shallbe received in person, through the mail, or by parcel service, in thepurchasing office, until, but no later than, the time and date set for thereceipt of proposals in the RFP. The time stamp clock in the purchasingoffice shall be the sole clock used to determine whether a proposal istimely received.



Timely receipt of proposals sole responsibility of vendors: It shall be thesole responsibility of the vendor under all circumstances to assure that itsproposal is timely received. The County shall assume no responsibility inassuring that proposals sent by mail or by parcel service and delivered tothe County Office Building will be timely received and time-stamped in the

purchasing office. Proposals must be time stamped: The time for the receipt of proposalsshall be determined by the time clock stamp in the purchasing office.Vendors are responsible for assuring that their proposals are stamped bypurchasing office personnel by the time and date for which proposals areto be received. Proposals kept in secure location until opened: All proposals received andtime stamped will be kept in a secure location in the purchasing office untilthe time and date for their receipt has passed. Identity of vendors confidential: Prior to the time and date that proposalsare to be received, the identity of the vendors and the number of

proposals received is confidential, and may be disclosed only to Countyofficials and only when disclosure is considered necessary for the proper conduct of the RFP process. Late proposals: Late proposals shall not be considered under anycircumstances, and shall be returned unopened to the sender.The purchasing agent may impose additional requirements pertaining to thereceipt of proposals if such requirements are set forth in the RFP and areconsistent with this manual and the Virginia Public Procurement Act.11-10 The Evaluation of Proposals; Development of a Negotiation ListThe proposals that are timely received shall be examined by the purchasingagent to identify each vendor. The selection committee is then convened toreview and score each proposal based on the evaluation criteria specified in theRFP. After the committee reviews the proposals, it chooses two or more vendorswho are qualified, responsible and suitable. The committee may choose a single11-8vendor, but only if the purchasing agent documents in writing that the vendor isthe only one qualified or is clearly the most qualified.The evaluation process should consist of feature-by-feature comparisons of theproposals, the evaluation of trade-offs among competing proposals, and, if goodsor nonprofessional services are being procured, cost comparisons. The selectioncommittee should review and evaluate proposals as they affect committeemembers’ areas of interest and expertise. All findings should be shared amongthe committee members. During this step the selection committee also shouldcheck references. The committee should check references other than thoselisted by the vendor.The procedure for evaluating proposals is discussed in more detail in chapter 15.11-11 Arrange a Tour of the Site or the FacilityFor design projects, a site or facility visitation prior to the negotiations or discussions will allow the vendors to observe the situation and ask questionsbefore they finalize their presentation for the negotiations or discussions. The



tour provides vendors with an important first-hand look at the County’s needs andallows for a further exchange of information about the project. Tours arerecommended for all but the simplest and most straightforward projects.The tour should take place at least two weeks prior to the negotiations or discussions.

11-12 Conduct NegotiationsAfter proposals for goods or nonprofessional services are evaluated, theselection committee begins negotiations with all of those vendors deemed by theselection committee to be fully qualified and best suited among those submittingproposals.After proposals for professional services are evaluated and before negotiationsare conducted, the selection committee engages in individual discussions with allof those vendors deemed by the selection committee to be fully qualified andbest suited among those submitting proposals.After the discussion stage, the selection committee negotiates only with thosevendors whose professional qualifications and proposed services are deemed

most meritorious, based on not only the vendors’ proposals, but also theinformation learned during the discussions. The vendors selected for negotiations are ranked, and the selection committee may negotiate only with thetop-ranked vendor first, and if a contract satisfactory and advantageous to theselection committee cannot be negotiated at a price considered fair andreasonable, the selection committee then moves to the second-ranked vendor and attempts to negotiate a contract with that vendor, and so on. A detaileddiscussion of the nature, scope and conduct of the negotiations is set forth inchapter 16.11-9Table 11-2

Comparison of Procedures for Negotiations and Contract AwardProfessional Services Goods and Nonprofessional ServicesDiscussions emphasize professional competenceto provide the required servicesMay discuss nonbinding estimates of total projectcostsOfferors ranked by qualifications and proposedservicesNegotiations begin with the offeror ranked firstAward to the offeror ranked first if a contractsatisfactory and advantageous to the County canbe negotiation at a fair and reasonable price; if not, begin negotiations with offeror rankedsecond, and so on

County may determine only one offeror fullyqualified or clearly more highly qualified, and maynegotiate and award contract to that offeror Discussions emphasize qualifications andsuitability, based on the factors in the request for proposalPrice may be considered, but need not be the soledetermining factor Offerors not ranked



Negotiations conducted with each offeror deemedfully qualified and best suitedAward to offeror who, in County’s opinion, hasmade the best proposalCounty may determine only one offeror fullyqualified or clearly more highly qualified, and maynegotiate and award contract to that offeror

11-13 Contract AwardAfter the negotiations are completed with each vendor for the procurement of goods and nonprofessional services, the purchasing agent, upon therecommendation of the selection committee, selects the vendor that has madethe best proposal, and awards the contract to that vendor. For the procurementof professional services, if a contract satisfactory and advantageous to theCounty can be negotiated at a price considered fair and reasonable, the contractaward is made to that vendor. If a contract award cannot be made, the Countythen moves to the second-ranked vendor and attempts to negotiate a contractwith that vendor, and so on.The procedure to award a contract when the competitive negotiation procedure isused shall be as follows: Notice of intent to award: The purchasing agent shall post in a public placea written announcement of the decision to award, which may be identifiedas a notice of intent to award. The notice of intent to award shall alsoinclude a statement that the public records pertaining to the procurementhave been and are available for inspection by those vendors participatingin the procurement process. The purchasing agent is not required toprovide individual notice of the intent to award to any participating11-10

Termination Planning

“There is no silver bullet that takes care of everything” – senior law practitioner

There is no doubt that all BPO contracts will eventually terminate. However, while the BPO vendor’s relationship with the

business may cease, the service requirements of the business will generally continue. Proper termination planning and

contracting is critical to ensuring a successful process transition (back) to the business (client) or new BPO vendor.

Factors Influencing Termination

The cause and circumstances surrounding contract termination, beyond simple contract expiration, can vary significantly

based upon circumstances. Examples of factors influencing contract termination include:

• change in executive leadership

• CEO, CFO, chief HR executive



• change in business strategy

• mergers, acquisition and divestiture

• expansion from regional to global environment

• new business model

• initial cost savings contracts lose luster

• failure of performance

• BPO vendor capability insufficient

• poorly scoped and priced offering

• inadequate change management processes

• BPO contract unable to support changing business needs

• desire to re-bid and/or change pricing structure

• changing market and economic forces

• pure cost savings contracts lose value

• desire to bundle/unbundle BPO vendor(s)

• nonpayment of services• untenable business circumstances

• aggressive negotiation tactics

• loss of credibility and trust

• either or both BPO vendor and client unable to work together

• significant or consistent staff turnover undermines client/vendor relationships

• a team oriented win/win relationship is never established

Early Planning for Contract Termination

“Over the last 20 years we have learned that termination is not especially difficult and is not a golden handcuff” – senior law

practitioner

The need to address contract termination in detail early in the negotiation process is critical to ensuring the lowest-risk,

highest-benefit contract is created. While parties to a new BPO contract and business relationship are interested in creating

the terms and circumstances which contribute to their mutual success, it is critical that the discussions include detailed

planning for all types of contract termination events as well. It is a serious mistake for clients to shy away from addressing

contract termination issues at the beginning of the contracting process either for lack of experience or out of concern for

setting a negative tone or damaging their relationship.

In fact, clients should insist on a thorough and comprehensive contract termination plan during the initial contracting

process. This will enable them to identify and utilize the most comprehensive and flexible approach possible to ensure the

framework and terms for managing complex and challenging contract termination situations are established well before

issues arise.

In addition to the benefits associated with well-thought-out termination plans and processes for change management and

the protection of business interests early in the BPO relationship, the worst possible time to address the high pressure,

complex, sensitive and emotional issues associated with unplanned BPO contract termination is during the termination

process. While minor improvements and negotiations may be appropriate during this time, the multitude of detailed and

complex termination related issues should be defined well in advance.

BPO Contract Termination Framework



A. Categories of Termination

“Every contract terminates” – senior law practitioner

While circumstances listed above as well as others can result in contract termination, there are really three categories of

contract termination as defined below:

1. expiration or non-renewal

2. termination for convenience including early and partial termination

3. termination for cause

Expiration or non-renewal

The contract is allowed to expire (expiration terms are invoked). While obviously self-explanatory, this type of contract

termination is somewhat rare; generally other factors will influence action in the form of termination for convenience or

termination for cause.

Termination for convenience including early and partial termination

Termination for convenience is the broadest or “softest” category and can be invoked for several reasons including the

following examples:

• changes in business strategy including mergers, acquisitions and divestitures

• changes in executive leadership

• the desire to rebid BPO services to obtain more favorable pricing

• desire to rebid BPO services to change the BPO environment itself such as moving from labor arbitrage or “lift and

shift” to business transformation

Termination for convenience should never be an option for the BPO vendor.

Termination for cause

Termination for cause is the most concrete reason for termination and generally involves two conditions:

• failure to perform on the part of the vendor

• failure to pay on the part of the client

B. Common Requirements in BPO Contract Termination

“Whether it is BPO, ITO, Transformation or F&A, HR, CMS for the most part the rights to terminate and the assistance the

BPO provider must provide are generally similar” – senior law practitioner

Regardless of the circumstances surrounding termination, all terminations involve certain common requirements. Correctly

addressing these common requirements is critical to successfully terminating the BPO contract regardless of circumstance.

Common requirements include the following:

1. process production elements



2. service continuation

3. transition support

1. Process production elements

“It is a major issue to address the ‘hundreds’ of contracts that support transformation and unwinding the third party contracts

are challenging and a big effort” – senior law practitioner

During the transition phase of the BPO lifecycle, the elements needed to produce the business process become the

responsibility of the BPO vendor. Upon termination, they must be transferred from the service provider back to the client or

to the new BPO vendor.

These process production elements typically include:

• personnel - including all the individuals and associated skills required to perform the process

• equipment - including facilities, infrastructure, hardware, peripheral devices, etc

• intellectual property - including software licenses

• third party contracts and services - at the same cost and productivity levels included in the contract

• data - including other confidential information

• process documentation - including manuals, instructions and other procedures

2. Service continuation

“The key is that the customer must have business continuity” – senior law practitioner

Generally, the client will require the continued provision of services from the BPO vendor for some period of time following

termination. This includes the need to provide service continuation during the time frame the process is being transitioned

back to the client or to a new service provider.

Common requirements for continued services include:

• all services continued - or specific services selected by the client - and in the same manner as the service delivery

model being used prior to termination unless authorized by the client

• notice provision - including specific notification processes identifying contact personnel by name

• timing elements - identifying pre- and post-termination assistance time periods (planning with BPO vendor

assistance can begin up to six months before termination date; this six month period is in addition to the transition time

period described below)

• service levels - including SLA and other performance credits - should not be affected by any service delivery model

changes as indicated above

3. Transition support

The objective of transition support is similar to the original transition activities associated with BPO contract initiation:

• continuation of business services without interruption

• transfer of all resources required for the client (or its designee) to assume control and responsibility for the services

from the BPO vendor



• timely and orderly transfer of services to the client or the client’s designee

Common requirements for transition support include:

• clear definition of BPO vendor’s role in transition planning and execution

• given changes to the client environment the specific components of this role may be significantly different than the

initial transition

• a cooperative environment regardless of the reasons for termination

• relationship management is key to a successful transition

Leading Practices

“The best practice in an outsourcing contract takes you to every phase of the contract” – senior law practitioner

The components listed below summarize the framework defined earlier in this brief and provide a method for identifying

leading practices for BPO contract termination:

Termination Framework

Categories of termination

1. expiration or non-renewal

2. termination for convenience including early and partial termination

3. termination for cause

Common termination requirements

1. process production elements

2. service continuation

3. transition support

Following are a series of leading practices for BPO contract termination which is based on the cumulative experiences of the

BPO client, vendor and the legal communities. Each of these components can be applied to all three of the termination

categories listed above.

While the points expressed below may be appropriate for your utilization, each BPO client situation and needs differ

substantially and the utilization of any specific item below must be considered in light of their unique needs.

Categories of Termination

In all cases the contract provisions surrounding the three categories of termination should include the following:

• The contract must discuss termination in detail and include specific termination provisions by termination category

• Termination assistance provisions must address all of the common termination requirements (more detail below)

• The period of termination assistance is typically 12 to 18 months

• Performance standards for termination assistance must be specified

• Any charges associated with termination assistance must be specified



Common Termination Requirements

1. Process production elements

“Most of the BPO providers want to provide both the technology and process, not use your system - understanding all of the

infrastructure pieces is terribly important” – senior law practitioner

Personnel

• The client or client’s designee may hire any BPO vendor personnel dedicated to performing the BPO services as of

the date of termination notification

• The BPO vendor waives its rights under any contracts with such personnel restricting their ability to be recruited or

hired by the client

• The client or its designee shall have reasonable access to personnel for interviews and recruitment

• The BPO vendor waives its rights under any contracts with such personnel restricting their ability to be recruited or

hired by the client

• The client or it’s designee shall have reasonable access to personnel for interviews and recruitment

NOTE: in cases where the above terms cannot be secured, positioning the next level of negotiation should include the

following:

• If hiring is not possible, an option to retain any of the staff currently assigned to the project, that you select on the

contract for up to three years at a rate reduced from list price rates

• Another approach is to seek a flat maximum percentage of staff assigned to the client as of notification termination,

for example, have the right to hire up to 30% of the staff

• These terms are most commonly used with large labor arbitrage contracts where the BPO vendor utilizes high

volume of staff in a competitive labor market, for example with firms in India

Equipment

At the client’s request, the BPO vendor is obligated to:

• obtain consents and assign to client or its designee leases for equipment used for providing the services

• sell to the client or its designee equipment owned by the BPO vendor and used for providing the services

• assign any maintenance agreements for such equipment

• provide all documentation relevant to such equipment

Intellectual property

• continued current grants by the BPO vendor of licenses or other interests in pre-existing and newly-created

intellectual property required for the BPO services

• BPO vendor is obligated to provide sublicenses to service recipients as required

Third-party contracts and services



• The BPO vendor will obtain for the client or its designee, on reasonable terms and conditions, rights to any third

party services required for provision of the services

NOTE: In large BPO deals and especially with transformation contracts vs. labor arbitrage contracts it can be very difficult to

“unwind” the third party contracts; there can be an enormous quantity of contracts unknown to the client. Although BPO

vendors will naturally seek to eliminate third parties during the course of BPO contracts in order to extend their services andincrease profitability, there can be a significant challenge with large enterprises. If possible, assigning a high quality person

to a contract management position at the outset of the BPO contract will significantly reduce the risks associated with

reliance on third party equipment. The key is high quality; traditionally a lower level employee is assigned and unable to

accomplish the complex tasks associated with this effort.

Data (including confidential information)

“The vendor has no rights to withhold access to data under any circumstances and the customer must know where it is and

where it is going and know that they can get access to the data in a form they can use” – senior law practitioner

• client retains ownership of all its data and confidential information

• BPO vendor is obligated to protect client data and confidential information and to return it promptly upon request or

upon termination/expiration

• all copies of this information should be destroyed as well

Process documentation including manuals, instructions and other procedures

• BPO vendor is obligated to prepare, maintain and update information sufficient to enable the client to understand

requirements for service delivery

• client owns the service manuals and the BPO vendor must relinquish them

2. Service continuation

• BPO vendor is obligated to continue to provide services during the termination assistance period

• scope of services may be reduced by client notice to the BPO vendor

• quality and level of performance during the termination assistance period may not decline

• service levels continue to apply

• charges remain unchanged

3. Transition support

• BPO vendor is responsible for drafting or assisting in the preparation of the transition plan

• BPO vendor is required to give the client or client’s designee reasonable access to facilities, personnel and other

resources

• BPO vendor is required to maintain confidentiality and is prohibited from removing equipment or data

• BPO vendor is required to support client’s bid process



NOTE: in order to ensure the greatest possible flexibility, the client must establish their rights with respect to utilizing BPO

vendor data as part of any bid process for a new vendor.

• certain BPO vendor confidential information will be required in the RFP or appropriate specification document to

ensure prospective BPO vendors can accurately assess and bid their BPO services

• it is better to go with a broad definition of information required with general examples than try to identify specific

confidential vendor data needed for the bidding process

• generally, the price will not be released by the BPO vendor to their competition and is generally not needed in the

specifications

BPO vendor is required to provide specific operational assistance in the transition process including the following:

• knowledge transfer

• delivery of documentation and procedures

• delivery of data

• cooperation with recruiting and hiring of personnel

• planning activities associated with the transition process include

• joint review of contract termination assistance requirements

• assessment of current client state, needs and gap analysis

• preparation of a termination assistance plan with BPO vendor’s assistance

• documentation of responsibilities and deadlines in as much detail as possible

Recommendations

An organization seeking to create BPO contract termination components that minimize risk and provide the most flexibility to

address unknown future conditions should seek the most experienced counsel and assistance available given time and

budget constraints.

The leading practices articulated within this report are the result of several years of experience; however the constantly

changing regulatory, technology, economic and business environments require constant updating in order to ensure new

issues are properly addressed.

While some firms have successfully negotiated and implemented BPO contract termination on their own, the level of

knowledge and experience in the marketplace at this time is more generally resident in professional firms such as legal and

consulting practices than within any specific company or the market at large. As the utilization of BPO increases, and there

is every indication that it will, the availability of experienced and knowledgeable resources in the market for potential

recruitment to internal positions will undoubtedly increase. However, as of this moment that is not the case, and companies

seeking to recruit experienced BPO staff are generally finding their efforts challenging at best.

Given the importance of contracts in the BPO lifecycle, the specific requirements associated with business continuity during

any BPO related transition are complex and require joint efforts on the part of the client and BPO vendor to be successful.

Without properly negotiated contract termination components, clients are at significant risk for business disruption. As

evidenced by this report, a high degree of value should be placed upon ensuring BPO contracts are constructed well in

advance of any termination event, utilizing current and leading practices to minimize risk and ensure a successful transition.



Just as it is important to formally kick off a project, it is also important to successfully close

the project. The value of having a planned project termination is in leveraging all of the

information and experience gathered throughout the project. If the solution is implemented

and the team immediately disbands, you don’t have an opportunity to wrap up the loose

ends, do staff evaluations, document key learnings or ensure that appropriate deliverables

are transitioned to support. Of course, a project can end unsuccessfully as well. Even in this

case, there are key learnings, team evaluations and other wrap-up activities to make the

most of what was done on the project.

When the project schedule is created, think about the activities that need to be performed to

gracefully and appropriately close the project. These activities include:

• Hold project conclusion meeting. A meeting should be held with the project team,

sponsor and appropriate stakeholders to formally conclude the project. This meeting

will include a recap of the project, documenting things that went right and things that

went wrong, strengths and weaknesses of the project and project management

processes, and the remaining steps required to terminate the project. Techniques or

processes that worked especially well, or especially poorly, are identified as key

learnings of the project. If your organization has a way to publish or leverage these

key learnings, they should be sent to the appropriate group. (Key learnings that seem

to work consistently on many projects, in many circumstances, might be raised to the

level of a best practice and be utilized for all similar projects.)

An agenda for the conclusion meeting should focus on what the project was supposed to

accomplish and what the project actually accomplished. The discussion should lead to a set

of key learnings that describe what went well and what didn’t work. The agenda would be as

follows:

o Discuss the purpose of the meeting

o Develop ground rules (optional)

o List what the project should have achieved

o Describe what the project actually achieved

o Discuss “why” for any discrepancies between “should do” and

“actually did”

o Agree on a set of lessons-learned for future projects



o List and document any remaining work required to close the project.

This includes activities such as those described below

• Declare success or failure. Sometimes it is obvious the project was completely

successful and in other cases the project is a total failure. However, in many cases,

there are mixed results. For instance, the major deliverables may have been

completed, but the project was over budget. Or, the project team delivered on time

and within budget, but the solution only met 80% of the business requirements. The

key to declaring success is to define up-front what the success criteria are. If an

agreement is reached with the sponsor and the appropriate functional manager on

what success means, the project team can be evaluated against those criteria. The

project team should first rate itself against those criteria, and then take the

recommendation to the sponsor for validation.

• Transition the solution to support (if applicable). If the solution will exist

outside of the project, it should be transitioned to the appropriate support

organization. The transition includes knowledge transfer to the support team,

completion and turnover of all documentation, turnover of the list of remaining work,

etc.

• Turn over project files (if applicable). A discussion should take place with the

support organization to determine which project and project management materials

accumulated during the project should be turned over to the support team. Based on

this agreement, some of the project material may be deleted or destroyed, backed-

up, archived, etc. Those files and documents needed by the support organization

should be turned over to them to store in the appropriate long-term library or folders.

• Conduct performance reviews. If the project was substantial, it may be

appropriate to do performance reviews after the project completes. In this case, the

manager of the project manager and the project sponsor evaluate the project

manager. The project manager reviews the entire team or at least the direct reports

(and then the direct reports review their direct reports, until everyone is covered).

Sometimes the team is rated as a whole and then team members use the team

rating as input into a personal performance review. Other times, the team members

may have individual reviews based on only their own contributions. There should be

some link, however, between team and individual performance. It would not seem to

make sense that a project could fail and yet all of the team members receive reviews

saying they all did an outstanding job.



• Reassign the remaining project team. Any remaining team members should be

reassigned when all the termination activities are completed. For some people, this

may mean completely new projects. For contract people, it may mean the end of

their assignments. For part-timers, it may mean a return to their other full-time role.

Some team members may transition into the support organization to continue

working on this same solution.

It is the responsibility of the project manager to build project closure activities into the

project schedule. These should be seen as vital parts of the project, not an afterthought as

the team is getting disbanded. The project is not considered complete until the closure

activities are performed – just as it would not be complete without the implementation

activities finished.

Contract Administration (1)

Documents

Transcript of Contract Administration (1)