Practitioner Developing Contract PDC Assignment - CIPS Developing Contracts in Procurement and Supply

Using a set of your organisations (or one with which you are familiar) terms and conditions

IF USING YOUR ORGANISATION’S T&C – Introduce your organisation and the contract (provide context). Are these standard / blanket terms and conditions that are used by your organisation regardless of spend / risk, or are these only used for a particular requirement (e.g. high risk / high value contracts?)

IF USING MODEL T&C (e.g. NEC / JCT / FIDIC, etc) – Introduce the Model terms. What are the model terms? Who is the organisation that has developed the model terms? What are the benefits of using model terms?

IF USING A DIFFERENT SET OF T&C (e.g. a call off contract from a framework agreement such as NPS or CCS) – Introduce the organisation and the T&C;

Consider the models that you could use? How important is the contract in the context of your organisation? What kind of relationship do you / should you have with the supplier?

How is a contract used to manage risk?

How does your contract ensure that the risk is allocated to the party that is best suited to manage that risk (e.g. that the contract does not simply ‘risk dump’ the risks to your supplier, and then through the supply chain)?

The risks of poor quality

 Include your chosen clause in the main body (either put it in a table or as an image as this does not count towards your word count)

Is it a condition or a warranty? And what is the implication if this is breached?

Is it an express or implied clause? What are some of the implied clauses from legislation?

What do you mean by quality in the context of this contract, and how is it defined / measured? How is the risk monitored/analysed (e.g. risk register, probability / impact)? How does the contract protect against poor quality? What remedies (if any) are available if quality is not of the required standard? Are there any ‘gaps’ in the contract? Is there a link to any statutory implied terms?

The risks of extension of time

WHAT IS THE RELEVANT CLAUSE?? Include the clause in the main body (either put it in a table or as an image as this does not count towards your word count)

Is the clause a condition or a warranty? And what is the implication if this is breached?

Is this an express or implied clause? What are some of the implied clauses from legislation?

What do you mean by extension of time? Is time of the essence? What impact would not delivering the contract on time have? How does the contract protect against not being delivered on time? Is there a link to any other clauses (eg liquidated damage / force majeure / change control)? What remedies (if any) are available if the contract is not delivered on time? Are there any ‘gaps’ in the contract? Is there a link to any statutory implied terms?

The risks of increased costs

WHAT IS THE RELEVANT CLAUSE? Include the clause in the main body (either put it in a table or as an image as this does not count towards your word count)

Is it a condition or a warranty? And what is the implication if this is breached?

Is it an express or implied clause? What are some of the implied clauses from legislation?

How does the risk of increased costs impact on the organisation? What impact would not delivering the contract on budget have? Is the supplier’s price framework / commercial submission included in the contract? What happens if there is a risk of costs escalating? How (if at all) does the contract incentivise the supplier to deliver the contract on or under budget (i.e. gain share)?

The risks of unethical practice

WHAT IS THE RELEVANT CLAUSE? Include the clause in the main body (either put it in a table or as an image as this does not count towards your word count)

Is it a condition or a warranty? And what is the implication if this is breached?

Is it an express or implied clause? What are some of the implied clauses from legislation?

How does the contract protect your organisation against the risk of unethical practice being undertaken by your supplier (and their supply chain)? How does the contract protect the supplier’s staff from unethical working practices? How does the contract protect your supply chain? Are there any latent risks that you can’t transfer? Why? What is the impact of this? How can this be managed?

Relevant performance measures are monitored and managed

What performance measures are used in the contract (provide examples, including frequency, target, etc)? How were these developed? How are they managed? Who is involved in managing performance (from both the buyer and supplier side)? What happens if there is poor performance? How do you incentivise improved performance? Do you benchmark against any other contracts / sources? Do you provide the opportunity for the supplier to monitor and feedback to your performance as a buyer?

Outline the concept of the “battle of the forms” and explain how you could ensure that any agreement is carried out under the organisation’s own terms and conditions

What is the battle of the forms? How does it affect the contract? What are the risks if you contract on the supplier’s T&C? How (if at all) does your contract protect against the battle of the forms?

WHAT IS THE RELEVANT CLAUSE? Include the clause in the assignment

What CASE LAW could you include to support your argument

Conclusions / recommendations

Are there any weaknesses/areas for improvement you can identify in the contract? Are the clauses robust enough? Do they provide adequate protection? Are the risks allocated to the party that is best suited to manage it? Are you measuring performance in the right areas? Does your approach to performance management encourage innovation and continuous improvement? Does your contract provide adequate protection against the battle of the forms?