Sub Contract Management

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:

• Sub contract sits above project and can have one or more projects underneath it.
• Comprehensive contract revision control with baselines.
• Control changes in contract by reference to contract change orders (variation orders).
• Contract can act as an invitation to tender and become contract if awarded to a supplier – the same contract could be used as basis for sending out invitations to tender to many suppliers.
• Defaults will be held at contract level (e.g. retentions, markups, payment terms).
• Deduction percentage (%) will be held.
• Contract can be developed with or without a project being created.
• Contract scope will be held.
• Lines without the need for part numbers.
• Multi-currencies within a contract are supported.
• Cost values will be held (quantities are optional).

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.