What is Contract Project Management? (Plus Tips)

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Project management contracts are legal agreements between you and your customers. You select which contract best suits the project and negotiate the terms. The contract spells out the duties of each party while the contract is in force.
  • Fixed Price Contract (FP)
  • Time and Material Contract (T&M)
  • Cost Reimbursable Contract (CR)

Types of Contracts – Key Concepts in Project Management

Contract project manager vs. project manager

Contract project managers and project managers share many of the same skills but ultimately serve different purposes on the team. Here are some differences in the two positions:

Job description

A contract project manager controls the contracts for a project, whereas a project manager controls the timeline and oversees the project as a whole. The contract manager may answer to the project manager, providing information about vendors and updates about the contract cycle. The project manager is responsible for the overall outcome of the project. In contrast, the contract project manager is responsible for ensuring the contracts are legitimate and clear for both the client and the vendor. Project managers may coordinate with the contract managers to make any requests or ask any questions related to contracts.

Direct superiors

The contract manager works on a project but may report directly to finance, legal, business operations, sales, and marketing with updates about their contracts. They may handle contracts for each team, depending on their needs. A project manager typically works with members of these teams, as their project may involve all departments. However, the project manager normally reports to business operations or sales and marketing, because theyre responsible for executing the projects set up by those departments. The project manager ensures the project succeeds by allocating resources and delegating tasks.

Expectations

Companies expect their contract managers to research and vet potential vendors or contractors and provide analysis and cost-benefit assessments of each vendor. They clear their contracts with the legal and financial teams to prevent negative outcomes. They keep track of the details of an agreement and function as the expert on the contracts for each party. These expectations are very different from those of a project manager, who is responsible for the entire project rather than the details. The project manager ensures the team completes the project by the deadline to the clients specifications.

What is contract project management?

Contract project management is the management of any vendor or client contracts associated with a specific project. A contract manager typically handles all contracts for the projects they work on to keep the processes organized and straightforward. They control the entire contracting cycle, from negotiating, writing, signing and filing. They ensure that each contract is legal, well negotiated and well thought out to prevent costly contract disputes. A contract project manager also vets potential vendors to make sure they only partner with reputable businesses, protecting them from future risk.

Skills effective contract project managers have

Here are some skills that effective contract project managers have that help them excel in their position:

1. Time management

Contract managers use time management to track the development of each of their contracts. To manage the different requirements of each contract, the communications with each vendor and the stages each contract goes through, they manage their time efficiently. They also have a deadline for each contract because before a vendor of the contractor can do any work on a project, they finalize their contract must finalize their contract. Contract managers can use schedules, calendars, and technology to maintain their deadlines and send automated messages to their vendors to manage their time.

2. Risk management

A contract manager vets the vendors they work with and negotiates the contracts. They use risk management to assess how risky each contract is before finalizing it. The contract manager is responsible for protecting the organization from unnecessary risk as much as possible. They may perform a risk assessment before signing the contract so they can analyze how much risk each contract involves and decide whether they want to move forward. They may also keep a close eye on dates and deliverables to make sure that no problems arise after they sign the contract.

3. Compliance understanding

Compliance is an essential part of contracts management, because contracts have to comply with federal and local regulations to be legitimate. The contracts manager should know about compliance regulations and changes in the regulations so they can safeguard against issues in their contracts or with the projects they work on. Compliance is especially important for industries with a lot of regulations, like healthcare, finance and manufacturing.

4. Attention to detail

The details of a contract can be very specific and have a large impact on the outcome of a project, so its important that the contract manager have a strong attention to detail. Noticing small details in phrasing or numbers can help a contracts manager spot a mistake and reduce risk for their organization. It can also help them when negotiating contracts, to make sure the get the best deal for their project. When organizing contracts for easy reference after theyve been finalized, the contracts manager can use their attention to detail to establish a useful organizational system.

5. Technology awareness

Technology can help a contracts manager track their contracts and maintain their contacts easily, improving their efficiency. Using technology is a skill that can help a contracts manager improve their processes and increase their productivity. Many companies use technology for their contracts processes, so its important that a contracts manager be able to navigate that technology, and utilize it and recognize when its made a mistake. They may also want to stay up today on upgrades and new techniques that can make their jobs easier.

Tips for success as a contract project manager

Here are some additional tips to help you develop a successful career:

Gain experience and skills

To become a successful contract project manager, the best thing to do is to gain experience with contracts so you can familiarize yourself with best practices. You can gain experience through getting a degree in business or contract law. You can also gain experience by working as an intern or getting an entry level job working with contracts. During your experience, you can develop the skill set a contract project manager requires. Familiarity with the technology and the compliance rules comes with study and practice.

Collaborate

Contract managers work with many team members from all departments when working on a project. They collaborate with these team members to communicate important contract information and translate technical jargon for their colleagues. They may also communicate with these teams to determine their needs for the project when negotiating contracts and researching vendors. As a contracts manager, you may also collaborate with the vendors and contractors. You can use your relationships to build.

Become an expert

The more experience you get, and the more you work with other members of your team, the more you can learn about your company and the industry as a whole. Becoming an expert in your industry can help you make better decisions about vendors and price negotiations because you can build your recommendations from your experience. You can also improve your risk analysis by building a strong understanding of the other companies and organizations you work with and how they operate. The more information you have, the more evidence your have to support each of your decisions.

Embrace technology

Technology has the power to streamline your processes and increase your productivity. You can automate your workflow to improve how you store contracts, share them with your vendors and edit notate them. You can use contract management software, which is software that was purposefully built to facilitate the easy management of an organizations contracts. These systems can serve as a single database for each of your contracts, making it easy to retrieve old contracts and create templates for new ones. It can also help you automate communication and deadline notices.

FAQ

Is contract management the same as project management?

While project managers are responsible for working with cross-functional teams to closely manage new initiatives from start to finish, contract managers are responsible for keeping track of every deadline, deliverable, and other obligations laid out in a company’s contracts.

What are the 3 types of contracts?

Learn below about the four most common types of construction contracts.
  • Lump Sum Contract. A lump sum contract sets one determined price for all work done for the project. …
  • Unit Price Contract. …
  • Cost Plus Contract. …
  • Time and Materials Contract.

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