What is Contract Management?

Effective Management of Healthcare Contracts

Contract management plans, organizes, and executes the activities required to manage the contract from start to finish. The role of this department is to make sure that all the processes are followed and no hiccups are encountered along the way. Contract administration on the other hand is responsible for day-to-day operations and running a successful business under the contract framework. This includes maintaining effective contracts in place, implementing operational procedures, monitoring performance, tracking costs as well as managing human resources and technology needs. Contract management vs contract administration can look like similar tasks at first glance but they are actually very different in practice. This article will help you grasp why so.

What is contract management?

Contract management is the process of managing contracts from inception to closure. This process involves a lot of planning to ensure that activities are correctly executed, risks are mitigated, and deadlines are met. In essence, the role of the contract manager is to ensure that the project stays on track and isn’t derailed by unexpected occurrences. It is the role of the contract manager to coordinate the work of internal and external personnel, ensure that all legal documents, such as contracts and agreements, are up to date. The contract manager is responsible for obtaining the necessary approvals, such as the approval of the owner, the sponsor, and the customer. The contract manager is responsible for ensuring that the terms and conditions of the contract are followed.

What is contract administration?

Contract administration is the process of managing a contract from start to finish. This process involves a lot of planning to ensure that activities are correctly executed, risks are mitigated, and deadlines are met. In essence, the role of the contract manager is to ensure that the project stays on track and isn’t derailed by unexpected occurrences. It is the role of the contract manager to coordinate the work of internal and external personnel, ensure that all legal documents, such as contracts and agreements, are up to date. The contract manager is responsible for obtaining the necessary approvals, such as the approval of the owner, the sponsor, and the customer. The contract manager is responsible for ensuring that the terms and conditions of the contract are followed.

Differences between Contract Management and Contract Administration

– Focus – Generally, while preparing a bid, both the terms and conditions in the bid document and the bid document itself is the same. However, the responsibility of the contract manager and the contract administrator gets split once the contract is signed. The contract manager is responsible for ensuring the terms and conditions in the signed contract are followed, whereas the contract administrator is responsible for the execution of the contract from start to finish. – Scope – The responsibilities of the contract manager and the contract administrator will vary depending on the nature of the contract. For example, if you have a contract to build a software, contract manager will be responsible for managing the design of the software while contract administrator will be in charge of executing the project. – Composition – The contract manager and contract administrator roles are often combined in the form of a project manager. In such a case, the project manager manages the overall project and both contract management and contract administration roles are combined in this person.

Key Takeaway

The roles of the contract manager and the contract administrator can be distinguished based on their focus and scope, as well as the composition of their roles in a contract. In essence, contract management is responsible for ensuring that the project stays on track and gets delivered, whereas contract administration is responsible for the day-to-day operations under the contract framework. It is advisable to hire a professional team like WWS for efficient contract management and executions of the contracts.
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