Efficient Contract Review for Effective Compliance
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This document outlines an efficient process for contract review to ensure effective compliance. It recommends identifying subject matter experts, defining a document management system requiring 7 documents for every file, and regular follow up meetings. The goals of contract review are confirmation, expectations, and risk analysis. An efficient review process includes identifying experts, tracking documents, and weekly meetings. Effective compliance has two aspects - following the internal review process and complying with contract terms. It suggests implementing a review process, document management, metrics, training, and internal audits.
Efficient Contract Review for Effective Compliance
- 2. Efficient Contract Review for Effective Compliance Breakout Session #: C14 Presented by: Robert E. Jones, CFCM, CCCM Date: July 22, 2013 Time: 4:00 PM – 5:15 PM
- 3. Agenda 1. Goals 2. Efficient Process 3. Documentation 4. Compliance 3
- 4. Why is contract review important? • What can go wrong in a contract? • Can you identify that up front? • How do some of you review contracts today? 4
- 5. 1.0 Goals of Contract Review 1. Confirmation 2. Expectations 3. Risk Analysis 5
- 6. 1.1 Confirmation • Did the customer order what they said they were going to order? • Correct quantity and pricing? • Same T&C as pre-negotiated? 6
- 7. 1.2 Expectations • What are the T&C, Spec, and SOW requirements? • Can we meet the delivery deadlines? 7
- 8. 1.3 Risk Analysis • What kind of risk is involved? – Technology – Schedule – Financial/T&C • How can we mitigate the risk? 8
- 10. 2.0 Keys to an Efficient Process 1. Identify subject matter experts (SME) (department managers?) 2. Define a system for tracking documents, revisions, reviews, and approvals (Document management, SharePoint, ERP) 3. Regular meetings and follow-up (weekly huddle) 10
- 11. 2.1 Subject Matter Experts (SME) • T&C - payment terms, warranty, insurance, termination, liquidated damages, etc. • Quality - quality requirements or certifications • Spec - can we build the product and meet the spec? • Exports - product jurisdiction, classification, and licensing requirements 11
- 12. 2.1Subject Matter Experts (SME) • Materials - do we have the supplies and can we get them in time? • Software - do we have updated test software? • Planning - is there capacity to build the product? • Program Management - are there any SOW issues? 12
- 13. 3.0 Documents for EVERY file 1. Signed Contract or Purchase Order – Including a record of negotiations, with references to other documents 1. Terms & Conditions – including any Quality clauses 1. Non-Disclosure Agreement (NDA/PIA) 2. Specification and/or Drawing – what is being built, designed, or serviced 13
- 14. 3.0 Documents for EVERY file 5. Statement of Work – how and where the work is to be performed 5. Export Review – including restricted party screening and product or service jurisdiction and classification 5. Quote Package – including original RFP/Q and Basis of Estimate 14
- 15. 4.0 Effective Compliance There are two aspects of compliance: 1. Compliance to the review process and your internal procedures 2. Compliance to the contract 15
- 16. 4.1 Compliance to the Process 1. Implement a review process – defined process, released procedure 1. Define a document management system 2. Reporting and Metrics for TAT(turn around time) 3. Training 4. Internal audit – could be part of QMS/AS internal audit 16
- 17. 4.1.1 Review Process • Hold a Kaizen event • Have a defined process and written procedure 17
- 18. 4.1.2 Document Management • Seven documents for every file • Defined naming and filing system • Document retention requirements 18
- 19. 4.1.3 Reporting & Metrics • Define metrics • Provide reports and feedback 19
- 20. 4.1.4 Training • Provide training as a result of Kaizen and updated process • Train new employees • Refresher training for those not actively involved in the process 20
- 21. 4.1.5 Internal Audit • Incorporate into your QMS/AS audit • Have a sister company audit • Have another department audit 21
- 22. 4.2 Compliance to the Contract • Whole separate set of issues 22
- 23. Review & Connect 3 keys to implementing an efficient contract review process: 1.Identify subject matter experts (SME). 2.Document management – 7 Documents for EVERY File 1.Follow-up – 5 Steps for Effective Compliance 23
- 24. Questions Robert E. Jones CFCM, CCCM Contracts Manager, Pole/Zero Corporation rjones@leftbrainpro.com (513) 728-1163 www.linkedin.com/in/rjones330 www.leftbrainpro.com 24
Editor's Notes
- #4: We could talk about T&C, flow-down clauses, etc. That’s a whole other seminar (or 2, or 3). This presentation is focused on the review process itself and compliance.
- #5: What can go wrong? What are we trying to prevent?
- #6: This is the “what” and “why” section of today’s presentation. We will get to the “who” and “how” sections later.
- #7: What else can we confirm with the customer?
- #8: What other expectations might be set? One of the main things I’ve learned in life is that all relationships are based on communication and expectations. And, when something goes wrong, it’s usually because of poor communication and missed expectations. How many times have you been disappointed about something, then later realized you never told the other person what you expected. In that case you failed to communicate and failed to make your expectations clear. Yes, there will be times when we communicate well, but expectations are still missed, and we will talk about that.
- #9: Have we identified and evaluated all of the risk? Do we have a template or matrix for tracking and ranking risk?
- #10: This is more of a Program Management tool, but it should be part of your overall contract review. You could even develop a tool just for the contract itself??
- #24: Who are your SMEs? What are the 7 documents? What are the 5 steps for compliance?