《CM PP1》.ppt

* * * * * * * ?Patrick THOREAU October 2010 Contract Management Course Presentation /Introduction CM PP 1 CNAM/Paris IIM –MiM – Course M229 Gr M21 Introduction Understanding the contracting process gives project managers better control over achieving objectives. As a project manager, you must be able to work effectively with contracting managers, purchasing professionals, and subcontractors to accomplish key objectives. Because contracts are developed in an increasingly complex and regulated environment, a solid understanding of the contracting process is critical and can give you an advantage, whether you are on the buyers or sellers side. What is a Contract ? A contract is an agreement between two or more persons (individuals, businesses, organizations or government agencies) to do, or to refrain from doing, a particular thing in exchange for something of value. Contracts generally can be written, using formal or informal terms, or entirely verbal. If one side fails to live up to his/her/its part of the bargain, theres a breach and certain remedies for solving the differences are available. The terms of the contract - the who, what, where, when, and how of the agreement - define the binding promises of each party to the contract. Contract Definition according to the PMBOK According to the PMBOK, A contract is a mutually binding agreement that obligates the seller to provide the specified product/service and obligates the buyer to pay for it. A contract binds both parties, buyer and seller. The seller agrees to provide specific products or services, and the buyer agrees to provide consideration for the service or good. Contract Requirements A legally enforceable contract requires: 1. An Offer (I’ll mow your lawn this weekend, if you pay me $30) 2. An Acceptance (You’ve got the deal) 3. Consideration (The value rec