Project Management

5 Essential Skills for Contract Managers

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You might be lucky enough to be working with contract managers on your project. This is normally the case if you have a massive procurement to do, or there are lots of high-value contracts relating to what you are building. Think civil engineering projects, construction, oil and gas – that kind of thing.

However, contract management is also a skill that many of us have to have by default, because we don’t have contract management personnel available to our projects. If you aren’t working on the country’s biggest IT project supporting the national infrastructure, perhaps you will have to manage the contracts and relationships with suppliers yourself.

So what does that mean for you? Here are 5 of the essential skills a good contract manager needs. Can you see the overlap with project management?

1.  Communication Skills

I can’t actually think of many jobs that don’t need decent communication skills, so this one should be a given.

2. Contract Awareness

You need to understand the contract. That might sound obvious, but it’s amazing how difficult some contracts are to read and understand. You’ll have to explain parts of the contract to people who have no idea what any of the legal speak means.

If you think this is something you’ll have to do a lot, it would be worth preparing a short, easy to understand executive summary of the contract to use. You’re trying to highlight the key provisions, and what each party has signed up to.

3. Negotiation

You’d expect this as well, and there is normally a fair amount of negotiation to do in all areas on projects. This is a huge part of the day to day work of a full-time contract manager because they will be talking to suppliers all the time.

Negotiation with third parties involves preparation work, and looking for points of mutual interest from which to craft solutions that work for everyone. You’re trying to be proactive but get the best outcome for your own side of the discussions. It’s also important to be fair and respectful, because that’s the tone you want to set for your relationship.

4. Risk Management

Another key project management area that is useful in the contracting environment.

A contract manager – or a project manager fulfilling the role of a contract manager – should be looking for the risks in the relationships.

These could be:

  • New vendors whom you haven’t worked with before – there’s a risk they won’t be very good
  • Vendors who are struggling financially – there’s a risk they might tip over into insolvency or financial difficulties
  • Risks related to specific areas of the contract, such as contract terms about liability or indemnity
  • Risks related to specific deliverables from the contract, that you have asked the vendor to track and manage or mitigate on your behalf

And I’m sure you can think of others. The point is to make sure that contract and vendor risks are managed in the same way as your other areas of project risk.

5. Conflict Resolution

When negotiation and risk management don’t go to plan, you could find yourself in a conflict situation. Being able to successful deal with that is another important skill for contract managers.

You’re looking for an outcome that supports the relationship, assuming that it is worth saving. Conflict resolution includes a range of different options from sitting down and talking together through to the more formally defined options like alternative dispute resolution or ending up in court for litigation. Which, for the avoidance of doubt, I would suggest you strongly avoid!

Ideally, you should be sorting out any conflicts in an agreeable and professional way. As well as being generally nicer to do it that way, you will save your company a lot of money in legal costs.

Whether you have a contract manager doing the contract discussions for you, or you are being your own procurement expert, these are the skills that will help you get the best out of the contract.

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Posted on: June 26, 2018 09:14 AM | Permalink

Comments (12)

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Thank you for another amazing contribution.

I have a question, Should we include in the point "contract awareness" also "cultural awareness", I realized that contracts are very different from one country to another.

Good Solid points Elizabeth, Cheers !

Thank you Elizabeth, a great blog.

Thanks Elizabeth.

@Mayte, yes that's a good suggestion, thank you!

Very interested topic I like It!!! I wanna ask as I am QS/cost engineer , should I apply PMI-RMP? I see risk is important for contract management??

@Tamer I think it really depends on what you want to do with your career and whether a future employer would value that. Generally all education/training is good and you'll pick up something!

Nicely done! Specially interested in the risk management side, it's quite tricky to evaluate this beforehand. Thanks!

Good description of skills

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