Contract Management Contractual Performance, Renegotiation, and Claims: How to Safeguard and Increase Profit Margins

This book presents the latest findings relating to behavioral economics and the digital tools applied to contract management. There has been a decisive change in the role of contracts in the past decade, with contracts being transformed from purely legal necessities designed to protect against worst-case scenarios into tools for optimizing ongoing and mutually profitable business relationships with customers. There is an increasing emphasis on tight contracts, where time-risk and additional costs are passed on to the prime contractor, who may suffer heavy penalties in the event of non-performance. Contracts shape the behavior of the parties involved and as such have a major impact on project success. The contract manager’s goals are to protect the interests of the company and its shareholders by minimizing the company’s financial and contractual liabilities and to maximize its profitability while ensuring end-user satisfaction. 

  

Thecontract is usually written before the design is fully developed, and there is often a mismatch between contractual specifications and what the customer actually wants. Good contract management entails preserving the rights of the contractor by ensuring all parties respect their contractual obligations; providing advice to the project managers and engineering team; preparing profitable amendments to contracts or change requests; maintaining good record-keeping in the event that claims arise; filing notices when necessary; and guiding the project to a profitable conclusion. Like the ancient Chinese game of Go, moves made early in the game (notification of events) can shape the nature of a potential conflict one hundred moves later (arbitration threat). Contract management can also smooth the relationship between partners, allowing well-balanced “don’t-trade-a-dollar-for-a-penny” contracts to be managed through an established process rather than as sporadic events (we cannot claim to bein control of our business if we are not in control of the contracts on which it depends). Managing a contract with a mix of incomplete manuals, fragmented information, and poor planning can drive companies to “reinvent the wheel.” Contract management promotes a three-phase sequence to streamline information flows across the contract lifecycle, from the bid phase to performance, project closeout, and final payments.

Alain Brunet has more than 30 years of experience as a Project and Contract Management Director in various businesses (medical, chemical, aerospace, construction, transport, and defense). He is also a skilled teacher known for engaging people through change management principles. Alain has completed executive programs and holds PhDs in Engineering and in Management Science, with a particular focus on contract management. He is also a member of the Cercle Turgot, which participates in the analysis of contemporary financial economics.

Franck César is a graduate of Audencia Business School and the Institut de Haute Finance and holds a DECF (accounting and finance degree). He is a partner and Managing Director of consulting firm WillBe Group. He has worked for more than 15 years on Contract/Claim Management assignments in the industrial and IT sectors (in the context of claims, renegotiations, disputes, etc.) and is a recognized specialist in the implementation of contract management strategies, organizations, and practices for major clients across all sectors.