Contracting Process definition

The contracting process consists of assignments and related exercises between parties. Every organization may have their own way of expressing the ""contracting process,"" and they tend to characterize it by the tasks that various groups undertake. Certain characteristics, however, identify a typical ""contracting process,"" which represent the high-level procedures for conducting the procurement process (""The Contracting Process | Research Gateway,"" 2017).

The first phase of the high-level process is the specification stage, which involves the buying department communicating with the project manager. The role of the communication is to develop and approve the procurement items in a list which are necessary for the implementation of the project. The purchasing department is responsible for specifying the recommended items to the outside vendors ("Project Procurement Management: 5 Steps of the Process", 2017).

The second step is the selection process. This step is the procurement process that necessitates the purchasing department to find potential suppliers who can procure the necessary items by the specifications laid down in the specification steps. Therefore, the department would need to come up with vendor selection criteria. The criteria might regard the service quality, delivery, and part performance.

Contracting is the next step after selection of the potential suppliers. At this level, the purchasing department out to communicate with suppliers to arrange for the dates of delivery, conditions for payment and the necessary quality. This communication would ensure that delivery of the items ordered is on-time, with the indicated budget and are of the desired quality. The procurement contract should contain all the conditions and the all the information regarding the delivery schedule should be negotiated with the procurers on top of being approved by the purchasing department ("Project Procurement Management: 5 Steps of the Process", 2017).

Next is the control step. Every procurement management will be able to succeed if the purchasing department can appropriately manage the payment and the delivery process of the purchase items. The department can manage the process by organizing meetings with the vendors, reviewing ordered items against the specifications of the product approval, following up the delivery process and updating the procurement contract necessarily. The department will also be able to succeed accomplishment.

The final step is measurement. This step entails using the indicators and measures for system performance to assess the success and the effectiveness of the whole process. The project manager sets up a system while the purchasing department should use its method of measurement. Conducting workshops and special meetings would be necessary to determine the intermediate results of stage delivery, the Key Performance Indicators (KPIs), adherence t specifications of the product, procurers' performance, communication with suppliers and the like. If any gaps or deviations are identified, the purchasing department should send a notification to the project manager and make necessary alterations to the procurement plan ("Project Procurement Management: 5 Steps of the Process", 2017).

Contract Administration Policies/Procedures

Contract administration is the management of the contract and the buyer-seller relationship, reviewing and recording the performance of the seller in establishing the necessary corrective actions. It is one of the relevant sections of the procurement process that enable the owner of the project to get the quality product by the negotiation (Reincke, 2017).

Administration policies and procedures ensure that that identification and contracts organization is the process that should result in efficient operation, huge monetary performance and adhere to legal and consistent commitments.

One of the administration policies is that all the contracts for goods and services need to be made as per the Obtaining Policy which relates to the techniques and approaches for the contracts. Adherence to all the government, city and current regulations is also necessary.

Another administrative policy is that all the contracts should be signed under the direction of the Income Tax Act.

Moreover, all the process contracts need to be guided by straightforward, reasonable, expert way and evenhanded to enhance the achievement of the prerequisites of the end-client during the accomplishment of the best esteem (Reincke, 2017).

Over the life of the contract, all the contracts are gone into as directed with the aim of obtaining the best appreciation for the organization, while ensuring that the assets stewardship are guaranteed. All the contracts should have the basis of monetary and other assets points of view.

Further, all the contracting process should bring about maximum benefits to the organization and adjust its principal goal and key arrangement.

The incorporation of procurements should be a feature of the contract providing protection, sufficient repayment, risk alleviation and other relevant securities.

Contracting process also must obtain after a competitive process in the organization approach or enactment and the management technique.

The employees who enter into and oversee the contracting process in the interest of the organization should behave morally to guarantee consistency with the organization approaches, particularly the Conflict of Interest Policy (Reincke, 2017).

Eventually, once the contracting process has been duly marked and affirmed, the contract manager has an obligation to assure the organization and various gatherings with the contract to meet their individual commitments under the contract.

Tools and Techniques for the Contract Administration Process

One of the instruments for the contract administration process is the contract change control process. It is the framework that entails the arrangement of techniques and guidelines whereby alteration of the agreement is possible.

Another technique is the performance evaluation/review. It involves the assessment of the purchaser conducted performance which tracks the development of the seller in the implementation and delivery in the factors for the contract. The main aim is to address the agreement performance through the identification of achievements and breakdowns as well as predicting the finishing point of the contract declaration. It also enhances the recognition of the areas of understanding non-cooperation (Reincke, 2017).

Performance reporting is also another technique. It involves the combinations of the seller's performance information and giving them to stakeholders. The news regarding the performance will alert the management on determining if the vendor meets the objectives of the written agreement.

Further, payment system comprises the maintenance and equipping the management process useful in contract administration. It is important in providing compensation to the vendors in line with the terms of the agreement. It contains the reviews and approvals of the project management team

A record management is also the method for setting the correlative management roles and tools for mechanization are used in handling records and documentation. The managers of the project use the management system to remain associate of the documents for agreement and correspondence. It also assists them in accessing, retrieving and archiving the documentation.

Conflict Resolution Techniques in Managing Contractual Relationships

Conflict is bound to occur after the selection of different people in a group since they have different personalities. One of the ways of resolving conflict is trying to avoid it in all cases. When one does not enter a conflict scenario, there is a chance of coming up with useful ways of addressing the conflict. The conflict can, however, get worse with time if there is no relevant follow-up on the same.

Another way of resolving conflict is highlighting the areas which can act as the source of understanding, instead of concentrating on the areas of difference. It would acknowledge the benefits of the professional relationships in the road to make the project successful ("The Contracting Process | Research Gateway," 2017).

Another technique for resolving conflict is compromising. This method entails measuring that the procurement or the project team accommodates everyone. Everyone participates in the process of decision making. The technique recognizes the fact that some conflicts cannot be resolved. The project manager needs to understand the needs of each team member to make this method useful. The manager may also need to have an understanding that the project might need adjustments as per the members/ decision.

Steps for Closing out Project Procurements

The close out stage occurs after the completion of planned work. The project team will settle any issue open and review the contract to ensure that all the goals were met. The team will then ensure that any changes that they requested were incorporated into the project to make relevant amendments.

The techniques that the project manager will use in this process are the procurement audits and record of the management system. Record keeping will assist the directors of the project in making consistent improvements of their projects in future. Procurement audits ensure that there is no or minimum loss during the purchasing process.

Importance of Closing Project Procurements and Accounts

End project procurement and accounts is the last phase of the life cycle of the project. The closure is triggered when the supporter of the project officially accepts it. The importance of this stage is to enhance the operations of service and deliverables, production evolution and completion of managerial and logistical close-out activities. It also improves the release of the project resources and capturing the performance information that is crucial in getting better future products.

External Influences on the Procurement and Risk Management Process

The external impact of the procurement and risk management process include economic, political and physical forces. Political factors can affect the project through the regulations that are in place at the time of the project development. On the other hand, economic factors include the risks from taxes raised to ensure that the project is built elsewhere ("The Contracting Process | Research Gateway," 2017).

Relationship between the Risk Response Plan and the External Influences

Project managers can use the external influences in detecting the owners and distributing resources. The distribution will help decrease the risk effect in case there are negative risks. Also, it helps in improving the scenarios having positive risks.


Contracting process is a procedural process that needs to be guided by relevant policies and managed by the project team in the absence of conflict. The procurement process should put the organization in a position better that it was before the initiation of the project of acquisition.


Project Procurement Management: 5 Steps of the Process. (2017). Retrieved 20 March 2017, from procurement-management/

Reincke, K. (2017). Contract Administration - myPmps. Retrieved 20 March 2017, from administration.html

The Contracting Process | Research Gateway. (2017). Retrieved 20 March 2017, from process

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