Projects are complex and companies cannot do everything themselves. They need to buy materials and services from others. Any contract bears the risk that the vendor will fail to deliver.
Therefore, you need someone who is experienced to take the correct legal actions and to protect the project. However, contract management is often an overlooked: to save money, many companies delegate contractual duties to project managers who do not have legal experience and suffer from work overload, instead of employing a contract manager.
Our experience shows that this strategy has the opposite effect. It is costing the company time and money.
Project managers should be responsible for leading the team and driving results. Contractual tasks, however, should be delivered by contract manages who handle all contract write-ups, negotiations with clients, contract modifications, signing, tracking, the fulfillment of all contractual obligations as well as renewals.
The main benefits of successful contract management are:
- Risk reduction
- Financial optimization
- Operational effectiveness
Do you have questions about contract management in plant projects?