Trouble in contract paradise? How to get your project back on course

Trouble in contract paradise? How to get your project back on course
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Issue management can be difficult and confronting for everyone involved. As with any relationship, there will be times when things don’t go to plan and problems crop up. As the contract manager, it falls to you to get things back on course. Here’s how to prevent minor contract issues from becoming major challenges for you and your supplier.

Surprisingly, the issues that attract the most attention are usually minor issues.

Clear processes need to be set out and agreed to identify and manage these minor issues before they become major. At all times both parties should act cooperatively and certainly not hinder resolution of the issue. You and your counterpart should maintain the shared objective identified in the contract.

You have two options available when dealing with issues; relationship management and dispute resolution.

Dispute resolution – the last resort

As you might have guessed, dispute resolution processes are the very last resort. Dispute resolution is a legal avenue – which is an involved, expensive and lengthy process – so it’s usually reserved for major issues.

Minor issues are generally resolved using:

  • relationship management
  • performance management
  • escalation
  • documentation

Kick off with an issue management plan

Give issue resolution on your contract a head-start by discussing how issues will be dealt with during the kick-off meeting with the service provider. It’s a good idea to agree on:

  • what types of problems will be considered minor versus major
  • how issues are to be raised (tip: preferably in writing)
  • how resolution is to be tracked
  • when issues should be escalated

Issue management is one area where governance is particularly important. Minor issues that recur frequently can become major and could indicate a systemic problem. So it’s crucial that they are recorded and resolution is tracked. Ideally, complaints should be raised in writing and recorded in an issues management register.

Your issues management register should:

  • record the nature of issue, date reported and date resolved
  • monitor the provider’s performance in service delivery
  • monitor the provider’s record of failures
  • monitor recurrent minor issues that may be dealt with as major issues
  • provide information to contract authority’s representative

Relationship management

As the contract manager, your job is to make sure minor issues don’t become major if at all possible. This is where your investment in building a solid working relationship with your supplier reaps rewards. Deal with minor day-to-day problems face-to-face. When dealing with a tough issue, take a deep breath and remove any emotion from the situation. If you are both able to focus on resolving the problem cooperatively, you will be able to put a solution in place that works for both of you to get contract delivery quickly heading back in the right direction.

If however you’re sinking fast, escalating the issue through the governance structure of your contract works really well. Use issues escalation to preserve your relationship with your counterpart. Often just saying that you’ll “take it up with my boss” will resolve an issue. Asking your Contract Owner to talk to their counterpart can work really well and help preserve your working relationship with the supplier.

2017 Procurement Study

Carrot or Stick?

Keys to boosting supplier performance revealed

Our 2017 research study highlights clearly a number of practical insights that will help your organisation drive much stronger performance from your suppliers.

The report hightlights:

  • What performance buyers typically get from their suppliers
  • What suppliers recommend buyers should do to improve the suppliers performance
  • What interventions actually work to lead suppliers to better performance
  • Differences between managing contracts in the pubic and private sector
  • Three things you can do today to improve supplier performance

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