Developing Contracts in Procurement and Supply

Question:

(1) How your Terms and conditions ensure that you manage the risks of poor quality, extension of time, increased costs and unethical practice.

(2) Explain the concept of the "battle of the forms" and demonstrate how you could ensure that any agreement is carried out under your own Terms and Conditions.

(3) How your Terms and Conditions ensure that the relevant performance measures are monitored and managed.Guidance
Your work should consist of approximately 3,000 words and any source materials such as web sites, reports, articles, market data, journals or texts should be referred to in your references or bibliography.

Syllabus Coverage

The following content from the Practitioner syllabus can be used to answer this assessment:

- The main types of contracts and agreements
- The documentation that is used to create commercial agreements for the supply of goods, services or works
- The sources of express terms that can be used to regulate contracts made for the supply of goods or services
- The legal issues that relate to the creation of commercial agreements with customers or suppliers relating to offers, counter offers, acceptance, and other issues
- Core clauses that comprise commercial agreements with customers or suppliers
- Key provisions of legislation that relate to contracts for the supply of goods and services
- The use of contractual KPIs that link to technical and commercial requirements in contracts
- The main types of risks in the performance of contracts such as internal, market, economic, legal, ethical sourcing and performance based risks
- Performance management and ensuring compliance to agreed standards
- Payment responsibilities in contract management
- Creating targets for assessing the performance of suppliers based on the SMART (specific, measurable, achievable, relevant and timely) targets for performance

This assessment helps you achieve the following capabilities:

- Develop appropriate contractual agreements for suppliers with stakeholders
- Select appropriate contract terms that specifically relate to the supply of goods, services or works to be contracted for
- Review processes and procedures for creating contracts to ensure that all legal requirements are complied with and recommend any changes required
- Interpret and provide advice to colleagues and stakeholders on the core clauses of commercial agreements with customers or suppliers
- Research legislation that relates to contracts for the supply of goods and services and advise stakeholders on their implications
- Develop and advise colleagues and stakeholders on the use and benefits of KPIs applied to technical and commercial requirements in contracts
- Work with suppliers, internal customers or stakeholders to achieve added value in procurement and supply
- Evaluate the potential risks that purchased goods and services may be subjected to and liaise with suppliers and stakeholders to create plans to mitigate the adverse effects of these risks
- Monitor the supply of goods and services to ensure required performance standards are achieved
- Ensure compliance to, and take remedial actions for any deviations from contracted payment terms for purchased goods and services
- Formulate SMART (specific, measurable, achievable, relevant and timely) targets for supplier performance and agree their application with suppliers and stakeholders
- Create improvement plans to correct defective performance or to mitigate risks for purchased goods or services