About the Course

As businesses outsource more and more activity, it is vital that they ensure that the associated contracts deliver the services and/or products expected. A fundamental area that those tasked with managing the procurement and supply function are faced with is identifying, monitoring, and managing contractual risk.

This Contract Risk Management & Compliance training course will impart contracting function to ensure that risks are adequately allocated to owners and relevant to where that risk can be best managed. While a contract cannot, of itself, make risk “go away”, it can, and should, classify the risks, determine its responsibility for managing each risk, and for the consequences should the risk occur. Contract risks and uncertainties are everywhere. These contract risks range from complex regulations procedures, through increased globalisation and sophisticated supply chain networks, to contracts that drive strategic outcomes and competitive advantage.

Contract management has become key to running business risks – strategic, operational, compliance, financial, reputation, and legal. At the core of every commercial relationship deceits a contract that contains the formal responsibilities companies accept. Yet many businesses endure operating with scrappy contract management practices, with the contract viewed as a legal and administrative problem.

Core Objectives

The delegates will achieve the following objectives:

• Understand the risk mitigation best practices
• Know how to move contracts from the tactical to a more relevant strategic focus
• Describe the capabilities to recognise risks that may arise
• Apply skills in apportioning contract and procurement risk
• Classify the contract terms and conditions which assign risk
• Understand the difference between contractual risks managed by the contract and those managed by the project
• Apply the principle of ‘risk is placed where it can be best managed’
• Risks and opportunities throughout the contract life cycle and how risk transfers

Training Approach

The delegates will increase competencies through various instructional methods, including a lecture, cases/exercises, reviewing published articles, checklists, and group discussions covering current practices and their relationship to implementing new concepts.

They will be encouraged to bring real delinquent examples for discussion on a confidential basis and share their experiences of particular issues in their company or industry.

The Attendees

This training course is designed for managers and team members new to risk management or who would benefit from a more structured approach to managing risks with suppliers and internal stakeholders. It will benefit the delegates who participate in or support or manage contracts and are required to manage risks.

Likewise, it will be valuable to the professionals but not limited to the following:

• Finance
• Sales Managers
• Business Development Managers
• Technical Experts
• Project Managers
• Contract Managers
• Procurement Managers
• Internal Customers
• Project Management Professionals
• Audit, Claims, Financial and Risk Personnel
• Contracts, Tendering, Purchasing, Procurement, and Project Personnel
• Engineering, Contract Administration, Operational and Maintenance Personnel

Daily Discussion

DAY ONE: TYPES & MANAGEMENT OF RISK

• The Definition of Risk
• The Organisational Need for Contractual Relationships
• Different Categories of Risk for partners of a Contract
• The Process of Risk Assessment
• The Process of Risk Management
• Procedures of Qualifying Suppliers
• The Internal Control Definition
• Sharing of Control

DAY TWO: MINIMISING AND TRANSFERRING RISK

• Transferring Risk through Contract Types
• Firm Fixed Price or Lump Sum Contracts
• Cost Reimbursable Contracts
• Incentive Contracts
• Award-Fee Pricing Arrangements
• Indemnities
• Cross Indemnities
• Insurance

DAY THREE: RISK-RELATED TERMS & CONDITIONS

• External Events
• Force Majeure
• Strikes and other Labour Disputes
• Risk and Title
• Assignment and Novation
• Other Clauses that Need to Flow Down to Sub-contractors
• Risks Associated with Sub-contractors

DAY FOUR: DEALING WITH FINANCIAL RISKS

• Controlling Risk Associated with Payments
• Fraud and Corruption
• Limiting or Excluding Liability
• Distinctions between Liability in Contract and the General Law
• Gross Negligence

DAY FIVE: REMEDIES WHEN BAD STUFF HAPPENS

• Mistakes and Misrepresentations
• Impracticability of Performance
• Remedies Generally
• Types of Remedies
• Liquidated Damages
• Warranties