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CIPS L4M3 - Commercial Contracting > Chapter 1.1 > Flashcards

Chapter 1.1 Flashcards

Analyse the documentation that can compromise a commercial agreement for the supply of goods or services

1
Q

What does it mean when you are talking about ‘the contract’

A

The totality of the agreement between the parties as evidenced by the contract documents

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2
Q

Define schedule

A

A time-oriented attachment, structured and designed to be periodically updated. These may include annual price lists, a project delivery plan or a maintenance programme

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3
Q

Define annex

A

An attachment which is of direct relevance to the contract but which is not intended to be updated very often

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4
Q

Define appendix

A

An attachment to the contract which may be of use or interest but which is independent to the contract and really only for reference and background

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5
Q

How are modern commercial contracts designed?

A

To accomodate the fact that change is inevitable - therefore it is important to ensure there is a mechanism in place to ensure that the contract is easily accessible

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6
Q

Estimate

A

A suppliers best guess at what the price will be. It has no legal standing

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7
Q

Tender

A

A request from a buying organisation to invite suppliers to formally quote on a large value project

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8
Q

Quotation

A

A formal statement from a supplier detailing the cost to provide goods or services. May often include other consideration such as minimum order and lead times

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9
Q

Is there a difference between a quotation and a tender in regard to law?

A

No

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10
Q

Does an estimate have legal standing?

A

No

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11
Q

Should estimates be avoided in legal contracts?

A

Yes

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12
Q

Will a tender be more comprehensive and detailed in comparison to a quotation?

A

Yes

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13
Q

When is a quotation normally used?

A

When the only variable is price

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14
Q

What will the process for arriving at a quotation usually involve?

A

A buyer describing in precise terms what they wish to buy, and a supplier offering a price at which they are willing to supply it

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15
Q

Are terms and conditions usually specified in requests for quotation?

A

No

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16
Q

Name 4 situations where quotations should be used?

A
  1. For low-value, low-risk purchases
  2. Where the specification and delivery terms are fixed
  3. Where suppliers have been pre-qualified
  4. Where a framework or dynamic purchasing system has locked down the contract terms and price is the only variable
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17
Q

When is a tender normally used?

A

When there is potentially more than one variable

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18
Q

Is the process leading to a tender quite formal?

A

Yes

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19
Q

Name 4 situations where tenders should be used

A
  1. For complex projects
  2. For high-value or high-risk purchases
  3. For projects where quality and price need to be assessed
  4. Where access to unknown suppliers is required and there is a need to either pre-qualify them as part of a two-stage process, or to assess their suitability as part of a single-stage open tender process
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20
Q

Is an estimate a firm offer?

A

No

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20
Q

Are quotations and tenders firm offers?

A

Yes

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20
Q

Compare tenders to quotations

A

Tenders are more detailed and will include quality aspects as well as prices

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21
Q

Request for quotation (RFQ)

A

An invitation to suppliers to bid on specific products or services

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22
Q

Framework agreement

A

An arrangement that is put in place with one or more suppliers for the supply of a range of suppliers or services in which the prices (or a pricing formula) and terms and conditions are all agreed for the duration of the period of the arrangement

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23
Q

Are RFQs often mis-used?

A

Yes

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24
Q

Where do RFQs work well?

A

Under framework agreements where the contract terms are already fixed

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25
Q

Name 4 features of RFQs

A
  1. Degree of formality
  2. Delivery Speed
  3. Relationship to contract documents
  4. Implementation speed
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26
Q

Name 3 advantages of RFQs having a degree of formality?

A
  1. Reduces admin costs where specification is clear
  2. Frees up professional resource for more complex requirements
  3. Small and known supplier pool
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27
Q

Name 4 risks of RFQs having a degree of formality

A
  1. There is a risk that the RFQ may be done via a simple phone call
  2. Potential lack of an audit trail of the basis for the quote ‘you asked for/we quoted for’ disputes
  3. Possible lack of transparency potential for collusion or bribery if quotes are opened at different times
  4. Limited (if any) market engagement
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28
Q

Name 5 controls you could put in place relating to the degree of formality of an RFQ

A
  1. Set maximum value limits
  2. Set minimum acceptable formality. Use ‘quick quote’ e-tendering platforms
  3. Issue standard terms and conditions with all requests
  4. Monitor usage
  5. Train staff in possible risks
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29
Q

Name an advantage relating to speed of delivery in regards to RFQs

A

If price is the only variable, turnaround times can be short

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30
Q

Name two risks relating to speed of delivery in regards to RFQs

A
  1. Not always appropriate for price to be the only variable and may be used in the wrong circumstances
  2. Temptation to seek quick quotes when a more considered approach to aggregated spend is indicated
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31
Q

Name 2 controls you could put in place in regard to speed of delivery of an RFQ

A
  1. Use category management approaches to aggregate spend
  2. Set up framework agreements to ensure contract terms are fixed
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32
Q

Name an advantage of speed of implementation in relation to RFQs

A

Quick implementation is sometimes unavoidably necessary

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33
Q

Name 3 disadvantages of speed of implementation in relation to RFQs

A
  1. Notional compliance with internal rules without understanding the wider procurement landscape
  2. No thought given to contract terms
  3. No though given to supplier vetting
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34
Q

Name a control you could put in place in regards to speed of implementation when it comes to RFQs

A

Only permit quotations to be sought from pre-qualified suppliers

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35
Q

Name 2 risks of relationship to contract documents of RFQs

A
  1. Having no cross-reference to contract on the order risks a lack of clarity as to the contractual nature of the request
  2. Quotes often issued on supplier’s terms and conditions
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36
Q

Name 2 controls that could be put in place in regard to relationship to contract documents relating to RFQs

A
  1. Ensure terms and conditions are included in request and reiterate them at the point of order
  2. Cross-reference any information provided in the request with the order
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37
Q

Invitation to tender (ITT)

A

A formal invitation sent to suppliers inviting them to make an offer to supply goods or services

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38
Q

Public sector

A

Service organisations run by the government and usually funded by taxes

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39
Q

Utilities sector

A

Normally includes energy supplies, water and sewage, and telecoms networks

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40
Q

What code of practise does the UK construction industry have?

A

‘Practise Note’ (published by the Joint Contracts Tribunal - a body set up to include various stakeholder groups from both constructing and cluent sides of the industry)

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41
Q

What variables might tender returns/submissions include that mean they are more detailed than quotations? (4)

A
  1. Method statements
  2. Timescales
  3. Quality aspects of the delivery
  4. Price
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42
Q

What may open tenders request in tender returns/submissions?

A

Supplier vetting information because the suppliers have not been pre-qualified

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43
Q

Name 3 features of ITT

A
  1. Formality
  2. Lack of speed
  3. Relationship to contract documents
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44
Q

Name 3 advantages of the formality of an ITT

A
  1. Full audit trail, especially if electronic platform is used
  2. If process is robust, can provide transparency, reducing risks of bribery and corruption
  3. Potential for wider market engagement
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45
Q

Name 4 risks of the formality of an ITT

A
  1. Requires specific documentation
  2. Process-driven tender exercises risk a lack of project-specific thought
  3. Can create unnecessary admin burdens
  4. May be regulated by law - creates risk of challenge by suppliers if rules are not followed
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46
Q

Name 4 controls you can put in place in regards to the formality of the ITT

A
  1. Clear process, including options appraisals, reporting and accountability
  2. Ensure processes match legal requirements
  3. Audit random sample for compliance
  4. Train staff on formal processes
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47
Q

Name an advantage of the lack of speed of an ITT

A

Proper understanding of the time needed to deliver a tender process can drive improvements in forward planning

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48
Q

Name 3 risks of the lack of speed of an ITT

A
  1. Perceived or self-created urgency can drive poor practise
  2. Lack of understanding in the appropriate use of tenders
  3. Poor documentation leading to prolonged clarification processes and/or poor results
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49
Q

Name 4 controls you can put in place in relation to the lack of speed of an ITT

A
  1. Ensure the forward plan is robust
  2. Have a clear authorisation process for urgency
  3. Standardise documentation where ever possible
  4. Train staff in processes to ensure efficiency
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50
Q

Name an advantage of the relationship to contract documents relating to ITT

A

Clear and robust response schedules can easily be inserted into formal contract documents of the draft contract is properly designed to accomodate them

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51
Q

Name a risk of the relationship to contract documents relating to ITT

A

Inserting full tender response document into formal contract can create inconsistencies, especially where clarification exercises have been necessary

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52
Q

Name a control that can be put in place in regard to the relationship to contract documents relating to ITT

A

Design the tender return documents and the contract documents to ensure ease and clarity of use

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53
Q

Name 4 issues of ITT to consider in a real-world context

A
  1. Process admin costs
  2. Audit trails
  3. Transparency of process: controlled opening of offers
  4. Urgency and speed
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54
Q

Are costs to unsuccessful bidders recouped?

A

No

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55
Q

Bribery

A

The offer of a gift, financial gain or incentive to influence a decision

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56
Q

Corruption

A

Dishonest conduct, often by individuals who hold senior positions within organisations - can include bribery

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57
Q

Collusion

A

The cooperative but secretive or covert joining of allegiances of two parties

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58
Q

Extortion

A

Where one party exerts power over another in an attempt to force them into a particular action

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59
Q

What is an audit trail?

A

The written or electronic record of what was done, when and by whom

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60
Q

Name 5 reasons audit trails are important

A
  1. They reduce bribery, corruption, collusion and extortion by increasing the likelihood of being caught
  2. They provide solid evidence in the event of such activity occurring
  3. They improve accountability - even when there is no criminal or fraudulent intent, staff members tend to take more care when they know the actions can be traced back to them as individuals
  4. They help trace errors
  5. They provide solid evidence of the facts of a situation when disputes arise, particularly in relation to specification and/or offers of service
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61
Q

Transparency

A

Operating in such a way that everyone can see the actions performed

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62
Q

Nepotism

A

Using actual or perceived power to give an unfair advantage to friends or family members

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63
Q

Coercion

A

The act of forcing a person or organisation to do something through threatening behaviour

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64
Q

Waiver

A

A considered and deliberate decision not to apply normal rules

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65
Q

What should eliminate most of the need for immediate action scenarios?

A

Good category management and market awareness

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66
Q

What should an organisations internal rules include?

A

A section which sets out when normal supplier selection processes can be waived

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67
Q

What does a tender waiver process require?

A

High-level authority (normally a director) and must include a full business justification for not using the normal process

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68
Q

What should the tender waiver process include?

A

A requirement to state what has been learned from the situation and how (if) that can be built into operational improvements

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69
Q

What should happen if there is a reason for normal processes to be waived?

A

It should be fully documentation and approved at a high level

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70
Q

What is central to all commercial contracts?

A

The specification

71
Q

Name 6 issues of an under-developed specification

A
  1. Poor bids being received - either overpriced or underpriced
  2. Claims for extensions of time or additional payments
  3. Delays in the approvals process
  4. Admin costs resulting from contract clarification orders
  5. The potential for goods and services being delivered that do not serve the desired purpose, or being delivered in the wrong place, at the wrong time or in the wrong quantities
  6. The potential for goods or services being delivered which do not meet the required standards, which may be written in law, putting the purchaser, end-users or the general public at risk
72
Q

What is the specification?

A

The document which sets out the detailed requirements for the goods, services or works that you are procuring

73
Q

How is the specification normally included in the contract?

A

As an annex or schedule

74
Q

Name 3 risks of a specification

A
  1. Describing exactly what you want in miniscule and objective detail can make you miss out on opportunities for change and innovation
  2. Products should, where possible, not refer to a specific manufacturer or supplier, or a specific part number
  3. You may write a wish list that the supply market cannot meet or that is too vague for you to enforce contractually
75
Q

Payments by results (PbR)

A

This scheme is a mechanism where all or part of the payment depends on the provider achieving outcomes specified by the commissioner. Providers are, to a greater or lesser extent, free to choose the interventions needed to secure the desired outcomes

76
Q

Name the 2 main types of specifications

A
  1. Performance
  2. Conformance
77
Q

Name a lesser known approach to specifications

A

Use an outcome based schedule of outcome requirements

78
Q

What do outcome requirements encourage the use of?

A

Innovative approaches to meeting the procurement need

79
Q

Name an example of an outcome based specification

A

The UK governments payment by results (PbR) scheme which is increasingly being used to deliver public services

80
Q

Name 5 aspects of a performance specification

A
  1. Focus on outputs
  2. Sets out result to be achieved
  3. The ‘what’ not the ‘how’
  4. Gives supplier flexibility to present solutions that the buyer may not have considered
  5. Risk held by the supplier
81
Q

Name 6 aspects of a conformance specification

A
  1. Focus on inputs
  2. Gives specific methods, processes and materials
  3. May identify specific manufactures or components
  4. The ‘how’ as well as the ‘what’
  5. Ties supplier to set details
  6. Risk held by the supplier
82
Q

Should procurement professionals question specifications?

A

Yes

83
Q

Name 12 key things to think about when designing a specification

A
  1. Purpose
  2. Perspective
  3. Scope
  4. Improvement and innovation
  5. Regulatory compliance and quality
  6. Type
  7. Relevance
  8. Performance
  9. Clarity
  10. Service conditions
  11. Budget
  12. Waste and emissions
84
Q

Configuration control

A

A structured process used to ensure all documents and drawings versions are controlled effectively

85
Q

Contractual measures

A

Originally intended to refer to the measures in a contract that were not so critical and referred to as ‘warranties’

86
Q

Will a specification issued with an RFP or an ITT be fully incorporated into the contractual terms?

A

Not unless care is taken to ensure that it is

87
Q

Whats the simplest method of configuration control?

A

To ensure that a final and agreed version of the specification is reproduced and appended to the core contract document as a schedule, clearly referenced from the contract terms

88
Q

Name 3 problems that can arise if the specification is not fully incorporated into the contract

A
  1. Any total agreement clauses in the contract will invalidate anything not actually laid down in the contract documents, including anything included uin the tender information
  2. Any clarification or amendments taken during the tender process are likely to be omitted. This could potentially undermine the whole contract, as the parties may be agreeing to something different to what they believe they are agreeing to. At the very least, it creates scope for dispute and the costs of dealing with uncertainty and ambiguity
  3. Failure to use the most up-to-date specification when delivering the works
89
Q

What is a performance management framework?

A

A series of standards and targets to be achieved by the supplier, definitions of how those standards will be measured, and actions to be taken on the basis of the measurement results.

90
Q

What is the aim of a performance management framework?

A

To promote the best control possible of the things that can be influenced, and to ensure the best possible outcomes against agreed measures

91
Q

Name the 3 key components of a performance management framework

A
  1. Key performance indicators (KPIs)
  2. Targets
  3. Consequences
92
Q

Key performance indicators

A

These are measurable values that will enable a buyer to track how well a supplier is performing. KPIs are tracked over time and will enable the buyer to decide when remedial action may be needed to improve performance

93
Q

Name 5 reasons why you should set up and measure KPIs in a contract

A
  1. ‘More or less’ is never good enough. The contract sets a standard that should be a minimum standard. You cannot know whether that standard is being consistently met unless you measure it
  2. You cannot rely on good luck
  3. Use commonly recognised and defined measures such as metres, seconds, litres etc.
  4. Even the good relationship that you know to exist at the beginning of the contract cannot be guaranteed to continue
  5. Measuring performance demonstrates whether it is stable, improving or deteriorating - each of which can and should provoke a response
94
Q

Should organisations manage KPIs outside the contract?

A

No - this is poor practise

95
Q

What is a KPI an indicator of?

A

A level of performance

96
Q

What should KPIs be linked to in a contract?

A

A target

97
Q

Can you revisit KPIs and targets during the negotiation for negotiated contracts?

A

Yes

98
Q

Can you revisit KPIs and targets during the negotiation for tendered contracts?

A

No - they must be apart of the original tender invitation package

99
Q

Name 4 things KPI targets can affect?

A
  1. A potential suppliers ability to actually perform the contract
  2. A potential suppliers interest in the contract
  3. The price at which the supplier is willing and able to perform the contract
  4. The performance expectations in subsequent contract negotiations
100
Q

Incentive

A

Something which encourages a particular action or behaviour

101
Q

Disincentive

A

Something which discourages a particular action or behaviour

102
Q

Name 3 examples of consequences for not hitting KPIs

A
  1. Manually intervene
  2. Investigate and resolve the root cause of the problem
  3. Do both of the above
103
Q

When are KPIs and performance management frameworks contract documents?

A

When they say they are

104
Q

Name 4 tender submission aspects that could be included in a contract

A
  1. Purchase price factors, such as agreed price, or inflation rates
  2. Time scales for production and delivery or completion dates
  3. Logistical aspects, such as location, delivery method, packaging requirements, or transfer of ownership
  4. Location
105
Q

Name 3 KPI aspects that could be included in a contract

A
  1. Delivery performance, such as on time in full or delivery performance to the requested delivery date
  2. Quality performance, such as the number of defects
  3. Response times
106
Q

Name 2 specification factors that could be included in a contract

A
  1. Material requirements, such as a specific grade of metal
  2. Standards requirements, such as ISO 9001 or ISO 14001
107
Q

What are contractual terms sometimes referred to as?

A

Terms and conditions

108
Q

What do contractual terms make up?

A

The main body of the contract document

109
Q

Service level agreements (SLAs)

A

Document outlining the expected minimum level of service between a service provider and a client. It clarifies the scope of service, responsibilities of each party and how to escalate among other factors. A service level agreement is legally enforceable if it is referred to in a contract

110
Q

What is a formal contract?

A

Any contract or agreement which is ‘evidenced in writing’ and is intended to be legally binding

111
Q

Name 3 circumstances where you would have a formal contract

A
  1. The terms are set out in detail
  2. The parties have agreed the terms and want ti be able to enforce the agreement, with the power of the law if necessary
  3. The evidence of this is that the parties have written down these terms, and signed, or signed and sealed, the document
112
Q

Is it possible for a contract to exist without being recorded in writing?

A

Yes

113
Q

Name 4 examples of alternative names for a contract

A
  1. Agreement
  2. Commission
  3. A letter of appointment
  4. A service level agreement
114
Q

Describe a contract

A

The total agreement and may consist of a number of different documents. It may not actually be labelled ‘contract’ but might be called ‘agreement’, ‘commission’ or ‘appointment’

115
Q

Draft (a contract)

A

The formal drawing up of a contract, formulating the words and clauses

116
Q

Drafter (of a contract)

A

The person(s) who design(s) and develop(s) the contract wording

117
Q

Bespoke

A

Made or provided especially for a specific end user

118
Q

Name 6 advantages of using standard contract templates

A
  1. All of the key risk areas will be set out and therefore unlikely to be missed
  2. Standard clauses prompt drafters to think about relevance to current contracts
  3. The legal meaning of expressions and words will have been fully considered, possibly even tested in the courts, leaving less room
  4. Standard list of schedules to be attached prompts their inclusion
  5. Often cheaper to produce from a template rather than from scratch
  6. Templates drive consistency in layout and structure
119
Q

Name 6 disadvantages of using standard contract templates

A
  1. Potential to use inappropriate template
  2. Can result in complacency on the part of drafters resulting in a tendency to only check the clauses which normally need amendment and not think about the specifics of the current procurement
  3. Failure to cross-check references between clauses or sections creating nonsensical requirements or conditions
  4. References to legislation and standards may become obsolete or not updated
  5. Schedules may be appended with no firm reference to them in the contract terms, so they are not properly incorporated into the contract
  6. Definitions used in schedules might differ from those in the standard contract, creating ambiguity and the potential for dispute
120
Q

Name 2 advantages of using bespoke contract forms

A
  1. Focuses thought on the precise needs of the procurement
  2. Avoids the risks of using standard forms
121
Q

Name 3 disadvantages of using bespoke contract forms

A
  1. Language may be inconsistent with established legal interpretation
  2. Potential to omit less obvious areas of risk
  3. Potential to identify risk and remedy but not consider wider consequences
122
Q

Term contracts

A

Contracts written to last a period of time and include agreed terms

123
Q

Name 5 common contract sections

A
  1. The articles - very basic agreement: a summary
  2. The recitals - they provide context
  3. Contractual particulars - sets out specific parameters
  4. Full terms and conditions can include a definitions and interpretations clause
  5. The schedules - set out project specific detail
124
Q

Conditions

A

Conditions are the critical elements in a contract which can, if breached, allow for the termination of the contract or contractor

125
Q

Critical success factors (CSF)

A

Identify the key objectives and essence of a contract and determine the conditions that will deliver these objectives

126
Q

Warranties

A

Warranties are lesser terms in a contract which can result in damages but not contractual termination in the event of a breach

127
Q

Innominate terms

A

Innominate terms are terms which could be either conditions or warranties depending on judgements made as part of a dispute resolution process

128
Q

Name the 7 step process of establishing the contract terms in a formal contract

A
  1. The commercial team designs the contract and CSFs
  2. Draft contract discussed with potential suppliers as part of pre-market engagement
  3. Contract terms refined
  4. Draft contract issued with RFQ, ITT or invitation to negotiate
  5. Quotes or tenders received on the basis of stated terms or terms amended as part of negotiation process
  6. Quote/tender/final negotiated offer accepted, including confirmation of agreed terms
  7. Formal contract documents produced and signed (or signed and sealed)
129
Q

Market leverage

A

Another term for buyer bargaining power, the ability of a purchaser to strongly influence the outcome of commercial negotiations

130
Q

Name 2 things to be aware of when finalising contract terms

A
  1. The lower the purchasers market leverage, the easier it may be for the supplier to negotiate changes to the terms, either as part of the tender process or even after the contract has been signed
  2. In regulated procurement, once the opportunity has been advertised it is difficult to persuade purchasers that the terms can be changed
131
Q

Name 3 things that every contract term is designed to do

A
  1. Protect the supplier
  2. Protect the purchaser
  3. Balance the protection between them
132
Q

Name 7 things that key terms would cover if one party was to default

A
  1. Pricing
  2. Payment terms
  3. Risk allocation
  4. Insurance requirements
  5. Timescales
  6. Health and safety
  7. Actions and remedies
133
Q

What should you remember about contracts

A

They should protect both parties, but the degree to which they do so will reflect the relative bargaining positions of the purchaser and the supplier and their ability to influence the contract terms

134
Q

Name 3 ways of establishing what the terms of an agreement are in the absence of a contract?

A
  1. If the parties had been contracted previously, the terms of those agreements might be assumed to apply again
  2. If there are normal sector expectations about certain aspects of the delivery, they might be assumed to apply
  3. Either of the above could be discontinued if there were any evidence suggesting that either party had indicated that other circumstances should apply in this particular case
135
Q

What’s a schedule to a contract?

A

An attachment to the body of a contract form

136
Q

Why are contract schedules used? (2)

A
  1. To make it easier to incorporate project specific information in a contract without having to amend the wording of the main body of a document clause by clause
  2. It allows for the standardisation of terms and conditions, which then simply cross-refer to the detail in the schedules
137
Q

Name 4 benefits of a schedule to a contract

A
  1. Drafting the contract is simplified, and therefore quicker and more cost effective
  2. Within the purchasing organisation, clauses for similar contracts have identical wording, avoiding the risk of different approaches across the organisation
  3. Contract managers become familiar with the forms that they use regularly and, in the event that they need to refer back to the contract, they can do so with ease, knowing where to find the relevant information
  4. The contract and the procurement documents can be drawn up in such a way as to allow direct incorporation of a supplier’s tendered offer, reducing the risks of misinterpretation
138
Q

What type of contract will have a pricing schedule?

A

Any contract that does not involve a single fixed-fee payment on completion

139
Q

What does a pricing schedule do?

A

Sets out how the price is to be calculated for each invoice

140
Q

What might a pricing schedule include?

A

It may include various rates or simply confirm the total fee and the proportions payable at key stages

141
Q

What does the degree of complexity of the pricing schedule vary depending on?

A

The nature of the contract

142
Q

Is there a limit to the number of schedules that may be included in a contract?

A

No

143
Q

Finish the sentence. A schedule attached to a contract has no force unless…

A

It is referred to within the terms and conditions

144
Q

Name 14 of the most common types of schedules

A
  1. Specification
  2. Preliminaries or contractual/operational matters
  3. Performance management framework
  4. Delegated authority and contractual management
  5. Site lists, maps and plans
  6. Health and safety
  7. Method statements
  8. Sub-contractors
  9. Supply chain
  10. Alliancing agreements
  11. Core lists of exclusion lists
  12. Supplier’s staff
  13. Codes of conduct
  14. Data management
145
Q

What is the most important schedule to a contract?

A

The specification

146
Q

Where is the expression preliminaries often used in the UK?

A

Construction industry

147
Q

What do preliminaries do?

A

Explain the context in which the contract has to be performed

148
Q

Describe preliminaries

A

Can be an over-arching schedule which encompasses all those indicated as separate schedules

149
Q

Why are preliminaries often included in tender documents

A

So that a single line on the pricing schedule can be used to cover all associated overheads and risks

150
Q

What is a performance management framework?

A

The full framework including KPIs and targets, the assessment scheme and incentives, disincentives, bonuses and penalties

151
Q

What should performance management frameworks include in term contracts?

A

A mechanism for enabling adjustment of the targets and/or changes to the actual indicators to be measured

152
Q

Describe delegated authority and contractual management

A

Factors relating to the amendment, signatories, vested power, and management of the contractual performance

153
Q

Describe site lists, maps and plans schedules

A

Factual information in list or map form to assist in the clarity of identified points of delivery. A plan such as GIS mapping can help assist in avoidance of doubt of a location

154
Q

Define GIS (geographic information system) mapping

A

A means of storing, retrieving, managing, displaying and analysing data in relation to its geographic or spatial context. It can be used for any kind of data (qualitative or quantitative) mapped in layers which can range from global/international down to precise locations within buildings, depending on the parameters set and the needs of the data users

155
Q

Where might site lists, maps and plan schedules be particularly relevant?

A

In facilities management where external areas are involved, or where only parts of buildings come under the purchasers jurisdiction

156
Q

Describe method statement schedules

A

Describe how the desired result is to be achieved. Particularly important where performance specifications are used

157
Q

When is comes to method statement schedules where is it vital that the contract is clear?

A

As to whether the method statement provided is ‘approved’ or merely accepted. Approving or embedding a supplier’s method statement in the specification shifts some of the liability for the method from the supplier to the purchaser and unnecessarily fixes on one potential method as a contractual requirement whereas flexibility during the contract might be quite useful

158
Q

Describe sub-contractor schedules

A

Can include sub-contractors and/or approved manufacturers of components, but might equally simply set out the process for agreeing and/or approving the supply chain

159
Q

Describe supply chain schedules

A

The contract needs to make provision for sanctions, remedies or other actions if these schedules lay down minimum requirements

160
Q

Schedule of rates

A

A list of prices associated with the products or services to be provided. Note that the rate may be different for different order volumes

161
Q

Describe alliancing agreement schedules

A

A contractual mechanism for requiring subcontractors or co-contractors to work with a main contractor or the purchaser in setting up joint supply chains

162
Q

Are alliancing agreement schedules more common in framework agreements or term contracts?

A

Framework agreements

163
Q

When are alliancing agreement schedules useful?

A

If the combined buying power is greater than the sum of the parts

164
Q

Describe core list or exclusions list schedules

A

Where schedule of rates are based on national schedules of rates or catalogue prices, they are often quoted on the basis of a percentage discount against the schedule or catalogue price. The discount may not apply to all possible call off items

165
Q

Describe suppliers staff schedules

A

Where the provision of services is specifically dependent on the skills and qualities of individuals, there may be a requirement to set out key personnel who are material to the contract, such that the contract may be terminated without their continued participation - or at least without their replacement by personnel of proportionally similar skills and experience. That skill and experience may need to be set out in detail if it is to have any force

166
Q

Describe supplier staff schedules in relation to contact with children or vulnerable adults

A

There may be a need to set out specific staff-vetting processes and means of evidencing clearance to work on the project

167
Q

Describe codes of conduct schedules

A

They can be used to set out norms of behaviour for suppliers staff working on the contract, particularly in respect of working on the clients premises

168
Q

Name 6 examples of things included in the data management schedule

A
  1. Non-disclosure agreement requirements to protect intellectual property or commercially sensitive information
  2. Commercially confidential information in general
  3. Minimum cyber security standards
  4. Rules regarding processing, management and storage of any personal data which may need to be shared in the context of the contract (GDPR)
  5. Terms related to ownership and intellectual property rights (IPR)
  6. Terms related to the disposal of data post-contract termination
169
Q

Non-disclosure agreement (NDA)

A

Sometimes known as a confidentiality agreement (CA), this signed document is a legal agreement that information received will not be shared and remains the property of the originator

170
Q

General Data Protection Regulation (GDPR)

A

European regulation which sets out how personal data must be managed, applying to any data relating to any person in the EU - and the UK following Brexit - whether they are a European citizen or not, and to all organisations doing business in Europe, regardless of the nationality of the business ownership

171
Q

Intellectual property rights (IPR)

A

Protection of assets created through human intellect, such as inventions, literary and artistic works, designs, symbols, music, computer software and images. These assets may be protected by trademarks, copyright, design rights and patents

172
Q

What are the risks of a contract not having a change mechanism

A

At best it risks stagnation and at worst it risks ineffective delivery or early termination

173
Q

Name 7 things the change process should include when set out in the contract

A
  1. Who can request change
  2. Who can authorise a change
  3. Who can accept a change
  4. The mechanism for agreeing price adjustments in respect of such a change
  5. The implications for the contract if a variation order is rejected
  6. Details of variance management and configuration control processes
  7. Responsibilities for notification of variation to affected parties
174
Q

What must a variation order include?

A

A statement of any price impact on the contract value. It should also include timescales for delivery, date for completion or amendments

175
Q

What should all change orders reference?

A

Both the clause allowing for the change, and any clauses or schedules which it changes

176
Q

Where should copies of all change orders be held?

A

With the original contract documents - the orders themselves don’t need to be signed and sealed: authority for them to be valid is delegated under the terms of the contract, provided that they are issued in accordance with those terms

177
Q

What must happen to a contract register when a change order is made?

A

The changes will need to be reflected in the register, especially with regard to price and/or timescales

CIPS L4M3 - Commercial Contracting (8 decks)

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