When managing contracts with suppliers, it is vital to record creation of the contracts, submission of invitations to tender, receipt of tender response, as well as general changes on the contract. All this information makes it possible to monitor the contract throughout its lifecycle. Contracts will need to be cost controlled, have progression of work recorded, and allow for revisions of contract baselines while managing applications for payment and cash payment activities.
The customer will submit invitation to tender from prospective suppliers and will have to track the bids or quotes within the constraints of the tender.
The Sub Contract Management functionality includes the following key capabilities:
The sub contract normally goes through the following stages:
Create
When creating the contract a lot of information can be entered. Some of it is required, while most of it is optional. The activity Create Sub Contract only covers the general contract creation – all additional contract details will be described in their corresponding activities.
Planned
The life cycle of the sub contract starts in the Planned status. At creation, the sub contract receives this status by default.
Released
After preparing the sub contract with required items and quantities, the sub contract revision must be activated. Once a revision has been set to the Active status, the sub contract can be Released. Releasing the sub contract indicates that the preparation of the contract is completed and that it is ready to start submitting invitations to tender to potential suppliers.
Submitted
It is possible to send out invitations to tender to multiple suppliers, and also multiple versions (revisions) can be sent to the same supplier if the scope changes. When submitting an invitation to tender, the invitation submit dates will be logged, and the invitation documents can be connected to the supplier or submission date.
Awarded
If an agreement has been reached with the preferred supplier, the status
of the sub contract should be set to Awarded, and no further invitations
can be sent.
Under Review
Once the sub contract has been awarded, it is common to review the contract
scope and its terms and conditions, make amendments, handle contract change
orders (variation orders), etc. that were not covered under the contract when
it was awarded. Before activating a new contract revision for these amendments
any connected contract change orders must have been approved and activated.
Reviewing it is optional, and for companies that do not have this as a part
of their business process it is possible to skip this stage and go directly
to the activation stage.
Active
Once the sub contract has been Awarded (or processed further to
Under Review) it can be activated. This indicates that the scope and terms
of the sub contract have been agreed with the supplier and that work can proceed.
Completed
Once the work has been completed, as defined in the contract, the sub contract should be set to the Completed status.
Close
Once all financial transactions on the contract have been completed, the sub contract should be set to the Closed status.