By Sheshagiri Anegondi (Sheshu)
There is debate on the terminology but essentially, Contract Life-cycle Management can be dissected into two main processes as follows:
Pre-Award – As the name implies, pre-award processes are all those activities that are undertaken before any contract is awarded. These processes typically take the longest time to transform and are vital to completing the full contract life-cycle. This the point where problems are first noted but in reality, any issues are normally just symptoms and not root causes. It is only natural that people will want to look at these processes when they believe they are leaving money on the table during contract negotiations. This may be true but without a proper audit of the backend, organizations can only speculate about how they lost out due to poor contracting. It is true that money can be left on the table at this point but the most important thing is to gain a deeper understanding of how and where it occurred. This should be inculcated as regular practice.
Post-Award – Gaining a deeper understanding of how money is lost demands a close inspection of post award processes. An example of post award processes includes:
- Change order management
- Document retention & Search within documents
- Financial dash-boarding & Spend Analysis
- Compliance Tracking
- Obligation tracking & Notifications
- Penalty/bonus tracking
But, the most important point is visibility. You must know what is contained in the contracts in order to learn where, how and why you are losing money, or, know where to place controls in the entire system.
In summary, full end-to-end contract life-cycle management results in organizations that are the best in their industry. Auditing post-award processes reveals vital information and makes data visible which can then be used to implement proper pre-award controls. This is an equally good strategy and can still be lucrative. First, get your contracts and then find out for certain where you are losing money.