Efficient Contract Reviewfor Effective Compliance

Breakout Session #: C14

Presented by: Robert E. Jones, CFCM, CCCM

Date: July 22, 2013

Time: 4:00 PM – 5:15 PM

Agenda

1. Goals2. Efficient Process3. Documentation4. Compliance

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Why is contract review important?

• What can go wrong in a contract?• Can you identify that up front?• How do some of you review contracts

today?

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1.0 Goals of Contract Review

1. Confirmation2. Expectations3. Risk Analysis

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1.1 Confirmation

• Did the customer order what they said they were going to order?

• Correct quantity and pricing?• Same T&C as pre-negotiated?

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1.2 Expectations

• What are the T&C, Spec, and SOW requirements?

• Can we meet the delivery deadlines?

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1.3 Risk Analysis

• What kind of risk is involved?– Technology– Schedule– Financial/T&C

• How can we mitigate the risk?

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Risk Assessment Tool

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2.0 Keys to an Efficient Process

1. Identify subject matter experts (SME)(department managers?)

2. Define a system for tracking documents, revisions, reviews, and approvals (Document management, SharePoint, ERP)

3. Regular meetings and follow-up (weekly huddle)

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2.1 Subject Matter Experts (SME)

• T&C - payment terms, warranty, insurance, termination, liquidated damages, etc.

• Quality - quality requirements or certifications

• Spec - can we build the product and meet the spec?

• Exports - product jurisdiction, classification, and licensing requirements

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2.1Subject Matter Experts (SME)

• Materials - do we have the supplies and can we get them in time?

• Software - do we have updated test software?

• Planning - is there capacity to build the product?

• Program Management - are there any SOW issues?

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3.0 Documents for EVERY file

1. Signed Contract or Purchase Order– Including a record of negotiations, with

references to other documents

2. Terms & Conditions– including any Quality clauses

3. Non-Disclosure Agreement (NDA/PIA)4. Specification and/or Drawing

– what is being built, designed, or serviced

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3.0 Documents for EVERY file

5. Statement of Work– how and where the work is to be performed

6. Export Review– including restricted party screening and

product or service jurisdiction and classification

7. Quote Package– including original RFP/Q and Basis of

Estimate

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4.0 Effective Compliance

There are two aspects of compliance:

1. Compliance to the review process and your internal procedures

2. Compliance to the contract

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4.1 Compliance to the Process

1. Implement a review process– defined process, released procedure

2. Define a document management system3. Reporting and Metrics for TAT(turn

around time)4. Training5. Internal audit

– could be part of QMS/AS internal audit

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4.1.1 Review Process

• Hold a Kaizen event• Have a defined process and written

procedure

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4.1.2 Document Management

• Seven documents for every file• Defined naming and filing system• Document retention requirements

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4.1.3 Reporting & Metrics

• Define metrics• Provide reports and feedback

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4.1.4 Training

• Provide training as a result of Kaizen and updated process

• Train new employees• Refresher training for those not

actively involved in the process

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4.1.5 Internal Audit

• Incorporate into your QMS/AS audit• Have a sister company audit• Have another department audit

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4.2 Compliance to the Contract

• Whole separate set of issues

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Review & Connect

3 keys to implementing an efficient contract review process:

1.Identify subject matter experts (SME).2.Document management

– 7 Documents for EVERY File

3.Follow-up– 5 Steps for Effective Compliance

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QuestionsRobert E. Jones

CFCM, CCCMContracts Manager, Pole/Zero Corporation

rjones@leftbrainpro.com(513) 728-1163

www.linkedin.com/in/rjones330www.leftbrainpro.com

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