Contract management

It can be summarized as the process of systematically and efficiently managing contract creation, execution, and analysis for the purpose of maximizing financial and operational performance and minimizing risk.

A study published in 2007 found that for "42% of enterprises ... the top driver for improvements in the management of contracts [was] the pressure to better assess and mitigate risks" and additionally, "nearly 65% of enterprises report that contract lifecycle management (CLM) has improved exposure to financial and legal risk".

[7] CIPS also notes that in some cases the procurement team may have an extended role in maintaining contract management.

A change may be based on: During the post-award phase, it is important to ensure that contract conditions and terms are met, but it is also critical to take a closer look for items such as unrecorded liabilities, under-reported revenue or overpayments.

A contract compliance audit will often commence with an opportunity review to identify the highest risk areas.

Having a dedicated contract compliance (and/or governance) program in place has been shown to result in a typical recovery of 2-4% and sometimes as high as 20%.

In 1979, Nobel laureate Oliver Williamson wrote that the governance structure is the “framework within which the integrity of a transaction is decided”.

[20] These standards were developed as a result of a 2013 "Cross Government Review of Major Contracts",[21] commissioned by the Cabinet Office to assess the management of major contracts held by the companies G4S and Serco,[22] and led by Bill Crothers, the government's Chief Procurement Officer.

[23] In December 2016 the NAO re-published a good practice contract management framework which had been first published in 2008 [22] with the help of the Office of Government Commerce, then part of HM Treasury.

The NAO "believed", based on practitioner feedback, that this framework was "one of the best references for the basic tasks necessary for good contract management".