What is a contract review meeting?
As a procurement professional, I've over 25 years procurement experience in contract management meetings and managing contract performance, I know how stressful the whole contractual review process can be for both buyers and suppliers.
Below is a detailed guide of how to prepare for a review of contract performance, what contact review questions to ask and what might be included in a contract management meeting agenda. Read on to uncover my tried and tested survival strategy and my top 5 contract review tips - how to make a great first impression, prepare for and hopefully thrive at your next contract review meeting.
Contract management is a method of effectively monitoring supplier performance to get the best value for money from a contract. Contract management is a key responsibility of procurement who must design and implement contract review procedures to manage risk within their supply chains.
Top 5 Contract Review Tips
Here are my top 5 contract review tips!
Survival Strategy #1
Learn The Language
If your contract review meeting is with the procurement manager or the contracts manager you are going to need to keep up. The strategy is to understand the ask and avoid the risk of looking like an idiot or worse, failing to deliver what's expected of you.
As a procurement expert, I can easily switch to excessive procurement acronym speak without even realising it. It's only when I see the glazed expression starring back at me that I stop and ask, "which part of what I said, don't you understand?" The response is often - "all of it!"
Public Procurement Acronyms
ABI - Activity Based Income
CPV - Common Procurement Vocabulary
DPS - Dynamic Purchasing System
DUNS - Data Universal Numbering System
EOI - Expression of Interest
FOI - Freedom of Information
GDPR - General Data Protection Regulations
ITT - Invitation to Tender
KPI - Key Performance Indicator
MEAT - Most Economically Advantageous Tender
OJEU - Official Journal of the European Union
PCR - Public Contract Regulations
PID - Project Initiation Document
PIN - Prior Information Notice
PO - Purchase Order
PQQ - Pre Qualification Questionnaire
RFP - Request for Proposal
RFI - Request for Information
RFQ - Request for Quote
SLA - Service Level Agreement
SME - Small and Medium Enterprises
SOR - Statement of Requirements
SQ - Selection Questionnaire
TED - Tenders Electronic Daily
TUPE - Transfer and Undertaking of Employees
Survival Strategy #2
Track Your Performance
A Key Performance Indicator uses a quantitative indicator. For example, a quantity, a number, a ratio or a percentage. Indicators provide a way of measuring and comparing numerical data. In a contract a KPI can also be referred to as a Contractual KPI or a Procurement KPI.
There is often a requirement to report your performance against a KPI in the contract. The expectation of procurement is often that suppliers will bring a report to a contract review meeting. This will form the basis of the discussion.
Most procurement managers will request a copy of the suppliers KPI performance report, prior to the contract review meeting. It is therefore a good idea to know in advance how you are performing against each contractual KPI. This information will help you to prepare for the contract review meeting with procurement.
If you are failing to meet a KPI, it may be a requirement of the contract that you prepare a performance report. This will include the reasons why you have failed to meet the KPI. You may also be required to provide a performance improvement plan detailing how you intend to bring your performance back to the required contractual KPI level.
On the other hand, if you are meeting or exceeding all of the contractual KPI's you could use the contract review meeting as an opportunity to ask for additional business or an extension to your contract term.
Survival Strategy #3
Request The Agenda
If you're provided with a contract review agenda in advance, prepare for each and every agenda item. Procurement professionals are thorough, you need to be through too.
If you're not provided with an agenda, you could be walking into an ambush. My approach - always ask for an agenda, prior to the contract review meeting. Even if the response is, we are just having a chat. Your understanding of a chat and procurements understanding of a chat, could be worlds apart. Forearmed is forewarned.
Other information you need includes:
What questions will procurement ask you at the contract review meeting?
Who will I be attending the meeting?
Who am I expected to bring with me to the meeting?
This information will help you to prepare for the contract review meeting and avoid any awkward questions or surprises.
I appreciate that not everybody is as super organised as me, when it comes to contract review meeting preparation. The procurement person you are meeting may genuinely not have thought about any of this in advance and may genuinely just be intending to have a nice chat. In this case, you will be viewed as super professional and on the ball, so you really have nothing to lose here.
What Questions might I be asked?
- How do you think you have performed under the contract?
- Where do you think you can improve?
- What is new and innovative in your industry?
- What are you doing to ensure you meet all your KPI's?
- What value will you deliver under this contract in the next 12 months?
- What are your investment and growth plans over the next 3 years?
The above questions are only a small sample of what a buyer may want to know when they meet with a supplier. You could be asked just about anything by the contract manager. The point is, none of the above questions are easy to answer, on the spot, so be prepared.
Asking for a copy of the contract review meeting agenda in advance so you can practice your answers (to difficult contract review questions), can only help in this difficult situation.
Survival Strategy #4
Never Go Alone
4 reasons to go to a contract review meeting with a colleague:
- Your colleague can make notes, whilst you talk.
- You can focus on your performance.
- Your colleague can feedback on how you can improve.
- Any inappropriate behaviour is witnessed.
Survival Strategy #5
Be Prepared To Sell
Make a list of topics you want to talk about and questions you want to ask. It is fine to write these down, procurement will view you as prepared and professional. Don't however, get out a huge laptop and obscure your face with it. This happened in my contract review meeting. I promptly told the supplier to put the laptop on the floor.
Ask intelligent questions to make the right impression. Show an interest in the organisation and the contractual relationship. You could ask questions about future developments. This may provide you with information about future opportunities for your company or threats to your current contract.
Copyright Naomi Clews Consultancy ®
About the Author
Naomi Clews Consultancy
Procurement, Tendering, Business Skills