The essential guide to selecting, managing and enhancing contractor relationships

Effective management and supervision of contractors can reduce wastage, ensure that projects are completed to time and improve team morale.

You risk exposing your organisation to severe financial penalties and turning a potentially profitable project into a loss-maker, if you don’t manage your contractors effectively.

This two-day course will provide managers of projects with a best practice framework for selecting and managing contractors, from the initial choice to final sign-off, including tender evaluation techniques, health and safety issues and contractual requirements.

Key learning objectives

This programme will help you to:

Who should attend

Training methodology:

This intensive two-day seminar will combine tutorial sessions, case studies and practical exercises throughout the course. All participants will receive a workbook and a certificate of attendance.

Day One

Planning the work: Creating mutually beneficial outcomes

The work that your contractor will undertake is effectively a project, so they should provide a project plan that defines the scope, estimate and schedule for their work. You also need to come to a mutual agreement on what each side will deliver to the other.

• Successfully planning the project

• Providing client education

• Techniques for clearly defining your technical environment and processes

• Developing KPIs to track a project’s success

• Performance monitoring for continuous improvement

Tender evaluation - choosing the right contractor through the tendering process

Selecting the right contractor and developing a partnership automatically solves many potential performance issues. However, evaluating dozens of proposals can be a daunting process.

• What are the most effective evaluation methodologies available?

• Effective techniques for filtering tenders RFP’s to reduce effort while increasing effectiveness

• How to rank and shortlist tenders/RFP’s

• Establishing a review panel: Who should be involved?

• Effectively assessing negotiable contractual arrangements

• What is tolerable risk and how do you assess it?

• How do you assess costs?

Selecting the right contractor

Your organisation may have a formal search process that involves sending out requests for proposals to a list of approved contractors, or it may have no processes in place, requiring you to do the legwork yourself. This session will examine the criteria you should look for when selecting a contractor.

• What are the key phases of contractor selection?

• Identifying one or more contractors who can meet your requirements

• The importance of references

• Analysis of the practical tools available for effective supplier selection

• How will you measure contractor performance?

Effective negotiation skills

• Planning your negotiation effectively

• Understanding the philosophy of negotiation e.g win-win, win-lose, lose-lose

• Understanding the key considerations for single/ team negotiations

• Examining the types of negotiators

• How to manage conflict and avoid common pitfalls

• Controlling the environment and final outcome

Day Two

Critical components of a good contract and performance and breach issues

A sound, clearly defined contract is vital when it comes to managing contractors. The more detail provided, the less the uncertainty during contract administration and project

implementation and the less likelihood there is of disagreement later over the basis of payment.

• The growing demand for performance-based contracts

• Determining the rewards/penalties to encourage contractor performance

• What do you do when it all falls apart?

• The remedies available for breach of contract including damages, specific performance and injunctions

• Examining the risk factors for the claimant

• Termination of the agreement

Case study examples

Incorporating incentives and consequences to ensure optimal outcomes

• Types of contract incentives and penalties

• Benchmarking the incentives in your contract against industry standards - how high should you set the bar?

• Using non-financial incentives as motivating tools

• Innovative incentive solutions - Share-in- savings and Award term approaches

Managing contractors on site

To manage the contractor successfully you need to maintain contact with them. It sounds simple but effective management will dramatically reduce the risk of contracting.

• Maintaining ongoing, regular communications

• Actively managing the contractor through status reports and inspections of work done

• Assessing the importance of having a quality assurance (QA) group

• Keeping track of the actual results versus the original plan

Examining health and safety issues relating to the selection and control of contractors

• Providing on-site induction for contractors covering the hazards that they will be exposed to

• Establishing how the contractor will carry out their work using safe practices

• Installing a procedure to ensure contractors hold the required certificates and permits to undertake the work safely

• Examining work permit procedures and any work that needs to be notified to OSH

• Developing an effective H & S reporting system

• Analysis of the HSEA Act

• Examining the “Approved Code of Practice� guidelines

• “Passport� site induction training schemes

Measuring, monitoring and reviewing work on project completion

Contractor performance reviews must ensure that the project keeps on course by measuring performance levels and making adjustments as necessary.

• Conducting regular performance reviews - striking a productive balance

• Identifying and addressing critical performance issues

• Managing variations and negotiating performance measures

• Strategies for turning around a contract that hasn’t performed

• Understanding your rights for effective dispute resolution