Managing & Negotiating with Consultants & Contractors

Managing & Negotiating with Consultants & Contractors

OBJECTIVES

Upon completion of this seminar, participants will know:

• Difference between Consultants and Contractors
• The criticality of developing a clear Statement of Work
• How to source and select Consultants and Contractor Firms
• How to evaluate bids and proposals
• What key clauses to include in contract documents
• Structure and application of incentive arrangements
• Examples of Model contracts
• How to evaluate proposals using price and/or cost analysis
• Best Terms & Conditions to protect your company
• Negotiation Planning and Strategy
• Contract Administration
• Monitoring and measuring Consultants and Contractors performance

WHO SHOULD ATTEND?

The seminar is designed for Engineering Project Professionals, Construction Professionals, Contract Professionals, Buyers, Purchasing Professionals, and financial personnel in organizations whose leadership wants advanced skills sets for those involved in major contracting and subcontracting activities. The program is a great way to develop those new to the function, or to prepare for a major project, or useful as a refresher for veteran Buyer Professionals.

COURSE OUTLINE

DAY 1

• Introductions
• Purpose of the program and objectives

Defining the Difference between Consultants and Contractors

• Role of Consultants & Responsibilities to Buyer
• Role of Contractors & Responsibilities to Buyer

Defining the Relationship with Consultants and Contractors

• Length of contract with consultant or contractor
• Type of work to be accomplished
• Reason for contracting out the work

Understanding the Rights & Obligations of the Parties

• Buyer’s Rights & Obligations
• Consultant/Contractor Firm’s Rights & Obligations

Consultants & Contractor Firms Pricing Strategies

• Top Down Strategy – Market based
• Bottom Up Strategy – Cost recovery based

Sourcing & Qualifying Potential Consultants and Contracting Firms

• Basic planning assumptions
• Proactive sourcing & project scheduling
• Use of the Internet
• References from other known past users

Defining the Scope

• Statements of Work (SOWs) – work packages
• Service Level Agreements (SLAs) – Key Performance Indicators (KPIs)
• Importance to overall success
• Clear and Concise to both Buyer and Consultant/Contractor
• Establishing Milestones for future progress reporting

DAY 2

Learning Review – day 1 recall

Invitations to Tender (ITT)/Requests for Proposals (RFP)/Requests for Quotation (RFQ)

• What type of request is best for a situation
• Why use competition?
• How many bidders is enough?

Proposal/Bid Evaluation

• Bid evaluation schedule
• Compliance matrix
• Terms & Conditions Analysis
• Factors that Affect Comparability

Contract Pricing & Price Adjustments

• Fixed price or firm price?
• Costs Plus (Time & Materials); Incentive based pricing
• Contract Price Adjustment Criteria & Clauses
• Price Adjustments using Price Indices
• Price vs. Quality Factors – Value for Money

Price Analysis of Proposals/Bids

• Currency exchange variation & risk
• Additional Pricing Information from Bidders

Cost Analysis of Proposals/Bids

• Reasons for Cost Analysis
• Requesting Additional Cost Information from Bidders
• Cost Estimating Methods
• Defining Total Contract Cost and Annual Cost

DAY 3

Learning Review – day 2 recall

Negotiations Strategies and Techniques

• Supplier/Buyer Positioning – pre-cursor for the negotiation strategy
• With Consultants
• With Firms supplying Contractors
• How to Negotiate with Sole Source
• Incentive Arrangements – Structure and Application

Model Contract Formats

• Formats for Consultants
• Formats for Contractor Firms
• Important Contract Articles

Financial considerations

• Specifics of items included in base price
• Definition of expenses not included in base price
• Hourly/Daily/Weekly/Project rates

Progress Reporting and Payment

• Payment based on Milestones Achieved not Stage Payments (elapsed time)
• Payment terms – When, Where, How, Currency Net payment terms and currency

Termination of Contract

• Reasons for termination – Both Parties
• Processes of terminating

DAY 4

Learning Review – day 3 recall

Confidential Information & Non-Disclosure

• Need for Pre-contract arrangements
• Access to confidential or proprietary information
• Agreement not to use or divulge
• How long in force after contract is complete

Insurance Coverage

• What is insurable?
• How much insurance required?
• Nature of proof of insurance and possible impact
• What type of coverage
• Who bears the cost – Consultant/Contractor Firm or Buyer

Intellectual Property Rights–

• Definition of IPR – Patents, Design Rights, Trade Marks & Copyright
• Background & Foreground Rights
• Ownership rights and assignment

Place of Performance

• Where work is to be performed
• On-site
• Off-site
• Consultants/Contractors place of business

 Independent Consultant/Contractor Status

• Define Understanding
• Define who pays taxes
• Not Entitled to Buyer’s Employees Benefits

Warranties and Representations

• No Conflict with Consultant/Contractor other work
• Consultant/Contractor agrees to perform in professional manner

Restrictive Covenants

• Consultant/Contractor will not provide like services to Buyer’s competitors
• Will not publish without prior written consent of Buyer
• Will not use in advertising, sales promotion or publicity without prior consent

DAY 5

Learning Review – day 4 recall

Awarding of Contract

• Contract formation & contract effectiveness conditions
• Notification of successful bidder
• Notification of unsuccessful bidders
• Official signatures and start dates

Monitoring and Measuring Consultant Performance

• Performance based on Statement of Work
• Milestones and progress against them
• Project Management Processes

Monitoring and Measuring Contractor Performance

• Performance based on Statement of Work
• Individual project performance
• Work expectations

Contract Administration

• Ensuring performance of Consultant/Contractor as Invoiced
• Resolving issues/problems from either party
• Preparation for Renewing Agreement
• Preparation for Terminating Agreement