Managing Suppliers & Contractors

Managing Suppliers & Contractors

INTRODUCTION

Suppliers and Contractors can be a very effective option for all types of organizations. However, managing those individuals (or companies) is essential in achieving the desired costs and benefits your organization desires. This program is designed to provide knowledge in:

• Sourcing & Selecting Suppliers & Contractors
• Issues to be considered before the Tender Invitation
• Raising the Invitation and Managing the Tender Process
• Key contractual clauses
• Contract type and language for best outcome with Suppliers and Contractors
• Developing “Statements of Work” and Service Level Agreements as contract documents
• Monitoring and measuring Suppliers and Contractor performance
• Negotiations with Suppliers and Firms supplying Contractors

OBJECTIVES:

 Upon completion of this seminar, participants will know:

• 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