Contract management

The Contract Management lifecycle is the evolutionary process under which a contract is drafted, reviewed, signed and executed. The ‘lifecycle’ is a process through which a need is defined, a procurement process completed, a contract developed, and a suitable supplier is identified.

Request

This initial phase of the lifecycle is the identification of the need which may be identified based on the expiry of a previous contract, a new requirement, a variation to the current contract or an extension of a current contract.

Procurement Process

The procurement process that precedes the award of a contract will vary from project to project. Some contracts are awarded following the conclusion of a tender process, an award from an appropriate framework or obtaining a written number of supplier quotations.

Contract Development and Signature

Once the selected procurement process has been concluded, the Trust and successful Supplier will draft and finalise a contract to include all of the terms and conditions that will govern the contract. The contract will need to be signed by both parties to become effective. The Trust is always the second signatory to the contract.

Contract Handover

This is a critical stage in the management of the contract. Contract Handover is the point at which responsibility formally moves from Procurement to the lead stakeholder accountable for the day-to-day delivery of the service.

Contract Implementation

This is the largest part of the Contract Management cycle. It will have the longest duration and requires the biggest resource to execute from both the Trust and the Supplier. Contract management meetings will be scheduled at this stage with regular meetings set up to monitor supplier performance against agreed objectives.

Change Management

The needs of the Trust or Supplier may vary during the contract period as it is difficult to always forward predict the Trust’s exact needs at earlier stages of this lifecycle. Changes to contracts can be permitted, providing they do not materially or fundamentally change the nature of the contract, but the process to do so is subject to a formal change management process as outlined in the contract.

Renewals

Many contracts have the provision to be extended beyond the initial term, however, enacting the contract extension is not automatic and is subject to supplier performance and mutual agreement between the parties.

Effective contract management is crucial for us for several reasons:

• Relationship Management: Strengthens partnerships with suppliers, service providers, and other stakeholders.
• Compliance: Ensures adherence to healthcare regulations and NHS guidelines and ensures the supplier delivers the performance expected and agreed within the contract.
• Cost Savings: Prevents financial losses due to missed deadlines, penalties, or poor negotiation outcomes and supports discussions regarding innovative improvements over the life of the contract.
• Risk Mitigation: Identifies and manages risks associated with medical supplies and services to staff and patients.
• Efficiency: Streamlines processes, reducing administrative overheads and saving time.
• Increased Productivity: Allows teams to focus on strategic tasks rather than administrative work.
• Improved resilience: Efficient management ensures risks are highlighted and able to be managed.

By implementing these practices, we can achieve better control over our contracts, leading to improved operational performance and stronger relationships with our suppliers and service providers.