5 Best Practices for Preparing a Contract Administration Plan

Once the ink is dry on the contract you've signed, you still need to actively manage the transaction in order to make sure that it goes off without a hitch. That's what a contract administration plan is for: a formal document that describes how both parties will remain in compliance with the terms of the contract throughout the length of the agreement.

In order to maximize the chances of a successful contract and reduce friction and disagreements, your contract administration plan should be as definitive and detailed as possible. Following the five guidelines below will help make your next contract administration plan an excellent one.

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5 Things Your Contract Administration Software May Be Missing

Not all contract management systems are created equal. One advantage of using a digital storage solution is greater knowledge of where contracts are. Frustration over locating contracts and determining status is common—we’ve heard someone joke that the local pizza parlor’s app could tell him the moment they added his extra anchovies, and yet he couldn’t easily pull up an important contract. Get swept up focusing on basic functionality, and you might miss a chance to evaluate important features that can help your organization save money and control risk.

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What Are Target Cost Contracts?

When you sign a contract, there's a certain level of risk that you assume. It's always a possibility that either party will fail to hold up its side of the bargain, resulting in dissatisfaction, delays and inefficiencies.

Going over budget is one of the most frequent reasons for broken contracts. Lump-sum contracts and reimbursable contracts are often both unappealing for one of the two parties because they place all of the cost burden on either the contractor or the client, respectively.

In an effort to resolve this standoff, target cost contracts have emerged as a happy medium between these two extremes. So what exactly is a target cost contract, and when is it most useful for contract management?

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Four Tips for Writing Contract Amendments

Drafting a sound contract often requires seemingly endless negotiations and countless versions of the agreement before all parties are satisfied. But, despite spending days, weeks, or even months getting a contract into a mutually acceptable format, circumstances often arise necessitating some sort of amendment to the existing contract language. It is important to remember that an amendment changes something in the contract, as opposed to an addenda which would involve making additions to the contract.

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The Difference Between Contract Management and Contract Administration

The terms contract administration and contract management are often used interchangeably. Although they share many similarities, at a granular level, they are technically different phases of the contract lifecycle. However, for many companies, the same team of professionals may be responsible for both facets of the contracting process, which is likely one of the reasons that people tend to conflate these terms. Deciding if these are related or distinct processes really depends on the size and resources of a company and whether the company has a specific team devoted to the contracting process. For smaller businesses, people often have multiple job functions, including the handling of all contract matters. Here are the primary differences between the two aspects of contracting:

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5 Best Practices For Contract Administration

Successful contract administration requires some serious planning and meticulous oversight. Regardless of whether a company’s portfolio has 50 contracts or 500, there will be a lot of details and deadlines to monitor. As a result, it is crucial for a company to have a solid contract management team in place, and one that is capable of overseeing any and all contracts that are added to the portfolio. Here are the top 5 best practices for contract administration:

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