I have spent the past 24 years in various roles in federal contract management, both as a warranted contracting officer for the federal government and as a manager for federal contractors. As a contracting officer, I have been responsible for small contracts of less than $100,000 to a suite of concurrent contracts implementing multiple phases of a large construction project in which two $250,000,000 contractors were working on the same site at the same time. I currently manage a small team of 12 responsible for over $500,000,000 worth of federal, state, local, and commercial contracts across various industries including Environmental, Construction, Facilities Operations, IT, and Engineering.
During my career, I have seen a lot of different ways that contractors and federal agencies have managed contracts with varying degrees of success. I have learned that regardless of which side of the contract you fall on, there are things you can do to improve your chances of successfully managing any contract. There are good habits that should be fostered regardless of how the other side is managing the contract, and there are bad habits that fill the vacuum created by failing to emphasize and nurture good habits.
Regardless of which side of the contract you fall on, there are things you can do to improve your chances of successfully managing any contract.
Habit #1- Know the contract better than the other party. I have seen both sides of this equation. It usually goes that the party that knows the ins and outs of the contract and understands the scope is in the best position when a disagreement arises. However, this isn’t just a good habit in the case of contract disputes, it can also be used to get things done that may have otherwise been disallowed under the contract. Understanding the contract in detail permits the parties to recognize pain points, develop solutions, and implement changes that work for both parties with minimal cost and/or schedule impact.
Habit #2- Focusing on the contract first, relationships second. This habit requires a significant amount of discipline, personally and organizationally. While it is true that relationships are important and can be relied on to assist in resolving many of the issues and challenges that arise during contract performance, there is still a fundamental element of sound contract management that depends on the contract to define that relationship. Over my career, the most successful companies, agencies, or projects have established the contract as the basis of the relationship followed by the personal/professional. Since the parties understand that the contract will govern, it reduces the friction caused by ambiguous requirements, disagreements, or poor performance by allowing the affected party to seek relief without damaging the personal or professional relationships that have developed during contract execution.
Habit #3- Following the contract regardless of the other party’s actions. I have spent more time in my career solving issues and problems that arise from failure to follow this habit than anything else. The predicate to successfully following the contract are Habits #1 and #2. Beyond that, this habit requires self-control, effective and efficient processes and procedures, and a strong composition. Cultivating this habit will ensure that your organization has the discipline to protect its rights under the contract regardless of the other party’s actions.
When organizations don’t emphasize these good habits, they end up with bad habits. For example, organizations that assume they understand the contract but don’t dedicate the time to knowing it inside and out run the risk that they are performing substandardly to the agreement or expectations of the other party. Supposing that you know the contract because you have done work for a similar agency can lead to problems such as failing to meet contract requirements, missing key elements of scope, or in the worst instances, performing work that wasn’t needed or required. Relying on relationships as the foundation rather than the contract creates problems when the other party’s team changes because you may not have the documentation, support, or rapport necessary to substantiate a position or action.
Finally, when you don’t follow the contract regardless of the other party’s actions, you end up doing things that are detrimental to your organization, such as not submitting formal communications that may be required or following the direction of someone who isn’t authorized to provide such direction under the contract. Complacency around these “bad” habits, whether within your organization or within your contract partner’s organization, is something about which to be vigilant. They will eventually cause unnecessary strife within the organization and with the other party and, ultimately, impact the bottom line by costing the organization more than was budgeted and/or scheduled.
Thus, by focusing on the establishment of good habits, you will not only improve your contract management but also mitigate the impact of a contract partner’s poor contract management and ensure a successful contract execution for your organization.
