Managing Suppliers & Contractors

Managing Suppliers & Contractors

OBJECTIVES 

• Difference between Suppliers and Contractors
• The criticality of developing a clear Statement of Work
• How to source and select Suppliers 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

COURSE OUTLINE

DAY 1

• Introductions
• Purpose of the program and objectives

Defining the Difference between Suppliers and Contractors

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

Defining the Relationship with Suppliers and Contractors

• Length of contract with Supplier 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
• Supplier/Contractor Firm’s Rights & Obligations

Suppliers & Contractor Firms Pricing Strategies

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

Sourcing & Qualifying Potential Suppliers 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 Supplier/Contractor
• Establishing Milestones for future progress reporting

DAY 2

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

Negotiations Strategies and Techniques

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

Model Contract Formats

• Formats for Suppliers
• 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

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 – Suppliers /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
• Suppliers /Contractors place of business

Independent Supplier/Contractor Status

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

Warranties and Representations

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

Restrictive Covenants

• Supplier/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

Awarding of Contract

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

Monitoring and Measuring Supplier 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 Suppliers/Contractor as Invoiced
• Resolving issues/problems from either party
• Preparation for Renewing Agreement
• Preparation for Terminating Agreement