Effectiveness Of Contact Life Management Assignment Sample

Introduction: 

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Contractual life management is a framework that provides a clear view of managing the contract of an organization. This is the process of organizing, directing, and controlling the activities of a contract. This is a system that fixes the obligations of the parties involved in the contract. This report study is associated with the completed contract of construction of the new Scottish parliament. In this segment, there is a competition to choose an architect and it is required to invite some companies of construction management. In this contractual framework, the design team is an essential aspect to achieve the desired objective of this construction work. In this contractual framework, the Ova Arup team has been appointed as structural engineers, and DLE - Davis Langdon and Everest has been appointed for quantity supervision. In this dimension, contractual life management is required for monitoring several operational aspects such as durability, obligations of parties, deadline for an operation work, order quantity, and others. In addition, in this framework, all the responsibilities of buyers and the suppliers are mentioned and it shows the compensations for contract breach by any party. In the context of commercial contracts, this framework focuses on some key requirements such as all the terms and conditions that must be agreed by the parties, the performance of each party, and others. In a commercial contract, the contractual management framework shows the mutual obligation of both the parties that remains enforceable by law. In this process, some aspects are considered to make a contract valid. In this segment, legal objects, lawful consideration, free consent, mutual assent, and others. An organization involves some major tasks of buying raw materials from the suppliers and delivering goods to ultimate customers. In each stage of the supply chain, this framework shows the payment procedure and delivery of goods. In this aspect, parties do legal agreements and promise to do some particular task. Therefore, a contractual management framework monitors the process of a contract from the initiation to the expiry of a contract. 

Background

In the context of an organization, a contractual management framework is essential to fulfilling the requirement of customers. In the contract of construction of a new Scottish parliament, a framework of contract life management is essential to monitor the construction from the initiation to the completion of construction. This research shows that some companies related to construction management were invited to submit the tender (Mann, 2018). In addition, in the initial stage of this framework, the main objectives were to appoint structural engineers and a team of quantity supervision. In this segment, the Ova Arup team has been appointed as the structural engineers of this Scottish parliament construction. Apart from that, Bovis Lend Lease has been appointed as the consultant of cost management of this construct of Scottish parliament construction (Imrie, 2017). In this contract, a contractual life framework shows the obligations of all the parties involved in the construct so that an optimum result can be gained. This framework shows the process of creating a contract to fulfill the want and needs of its customers. An organization involves a contract for the condition of sourcing and to fulfill the necessities of ultimate customers. This is the process that starts when a party offers to others for doing some particular task for mutual profit or under consideration (Song, 2021). An organization involves several contracts such as bill of exchange, security agreement, purchase order, and others. In this dimension, this framework plays an effective role regarding several transactions, the role of parties, compensation or penalties if any party abstains from doing the duty, deadline of performing a particular task, and others. In addition, this management system monitors the performance of contracts with the external vendor and analyzes the impact of losing a contract on the business operation (Chauhan, 2021). Therefore, it is helpful for a business to collect payment and process compensation claims if the deadline is missing. In the case of a partnership agreement, two or more two partners come to legal relations where all have some obligation to do certain duties. Apart from that, a business firm needs to recognize an opportunity or an unmet need of the market to gain profits. In this segment, sometimes two different organizations come into a joint venture relationship where they try to gain a competitive advantage to gain profits for a long time. Therefore, a contractual management framework is an integral part of an organization for the smooth functioning of several commercial contracts and to achieve desired objectives. 

Aim and Objectives

This research aims to identify the effectiveness of the contractual life management framework for the smooth functioning of several business contracts. In the context of the construction of the new Scottish parliament, a construct life management framework is essential in monitoring the obligations of all the parties, durability, order quantity, payment terms and condition, and others. In a supply chain of business, an organization remains involved with several contracts regarding sourcing or to fulfill the needs and wants of ultimate customers (Wang, 2020). Therefore, in the construction of a new Scottish parliament, several other contractual aspects regarding the delivery of raw materials, conditions of bills of exchange, pricing terms are essential to be monitored. In this dimension, this research aims to identify the management process of contracts to gain an optimum outcome. There are some objectives of this research those are as follows:

• To assess the Obligations of a supplier in delivering raw materials on time

• For understanding the obligations of parties involved with the construction of a new Scottish parliament. 

• To understand the challenges of selecting an architect of the construction

• For identifying the situations of compensation claim by a party

• To identify the effectiveness of the contract of delivery of goods to enhance the performance of suppliers and the contract effectiveness

• For understanding the aspects of making a lawful consideration

• To understand the effectiveness of contract life management framework in directing a contract effectively

• For identifying all the aspects of lawful consideration for making a contract

Research Questions

What are the obligations of suppliers in delivering raw materials for project work?

What are the obligations of the parties involved with the construction work?

How can a project manager mitigate the risk?

What are the internal and external uncertainties of a project?

What are the aspects of lawful consideration in a contract?

Why is the Contractual lifecycle management framework essential in managing all the activities of the contract? 

Contract Life Management

The contract Life management framework is the process of managing a contract from the time of a contract initiation to the expiry of that contract. In this dimension, CLM- contract lifecycle management is used by an organization to bring higher efficiency in the contractual process and to reduce the risk of financial losses (Goncharova et al, 2020). Therefore, in the construction of the new Scottish parliament, a contractual life management framework is essential for managing several operations in this construction work and to gain an optimum result. Constructing a life management framework is important to monitor a contract from the initiation to expiry or completion of the contract (Taylor and Wilson, 2021). In this dimension, in the beginning, stage of this construction, a contractual life management framework helps in managing several aspects such as inviting some construction management companies for submitting the tender, selecting architects

Figure 1: Contract Life Cycle Management

(Source: contractexperience.net, 2021)

Apart from that some other aspects required to focus for monitoring the progress of the construct such as the appointment of structure engineer for a while, appointment of cost management consultant, This is a kind of software that indicates the situation of a deadline missed by the party to perform an essential task and the obligation by another party (Neubeck et al. 2018). A contract life management consists of several steps those are as follows: 

Authoring Template:

This is the process where a template library is created to measure the performance of a contract and assess the risk of the contract. In this construction of the new Scottish parliament, the performance or the obligations of the involved parties are required to be inspected. In the context of the construction of Scottish parliament, permanence or the obligations of construction Management Company, an obligation of structure engineer, obligations of quantity supervisor, and performance of cost management consultancy were essential to monitor and control. In this study of the report, it has been found that Therefore, it can be said that the contractual life management framework is effective in monitoring the progression of the project and it is also effective in assessing the available risk in the construction (McHarg, 2018). An effective library consists of different clauses, rules, and documents that improve the risk management system of a contract. It directions and control the process of organizational contact and indicates the organization about any emerging dispute in a contract

Creation of a contract

This is the stage of contract initiation where a party offers another party to do something of mutual benefits under a consideration. In the construction of the new Scottish parliament, some parties come into the legal relationship to perform their duty in a period. In this project work there construction Management Company involves managing all the construction activities of the Scottish parliament. Apart from that architecture, structure engineers, resource management teams come in a legal relationship to perform a specific task to meet the desired objective of the project (Atterton et al. 2018). In this aspect, there are several contents and criteria associated with the contract, such as the deadline of delivery of goods, payment duration, several products, terms and conditions of pricing, and others. Therefore, it helps enhance the agility of the contract.

Figure 2: Creation of a Contract

(Source: researchgate.net, 2021)

Reviewing contract

This is the stage where all the aspects of lawful consideration are focused. Some aspects of lawful consideration such as a lawful object, free consent, mutual assent, lawful consideration, and others (Enslin, 2019). In this dimension, the project manager checked the performance of each party involved in the contract, condition of duty breach by any party, deadline missing of a specific task, and others. In this dimension, the contractual life framework is crucial for assessing the progression of the construction of the Scottish parliament and emerging risk in the project operation for deadline missing or duty breaches by any party. Therefore, in this aspect, all the objectives of a commercial contract are reviewed. It is essential to provide the organization full potential on a contract so that contractual risk can be minimized. 

Figure 3: Reviewing a Contract

(Source: babson.edu, 2021)

Approval of Cractont

In this stage of the contract lifecycle management framework, a contract is approved after inspecting all the aspects of lawful consideration. This process helps minimize the future risk due to a breach of contract. In this stage of the contract lifecycle management framework, the task is to give approval and establish a lawful consideration with a constitution management company. In the construction work of the new Scottish parliament, a legal relationship was made with a construction management company. In this process of approving a contract and establishing a legal relationship, all the aspects of lawful consideration are checked. 

Contract performance

This is the stage where the permanence and the obligation of the parties involved in the contract are observed. In this portion, the process of a compensation claim for contract breach, impacts of a missing deadline of a contract are analyzed, and others. In the context of the construction of the Scottish parliament, and approved construction Management Company begins the construction work (Van der Toorn et al. 2020). In this function, the contractual life framework indicates the performance of the project and the efficiency level of the operations. In the construction work of the new Scottish parliament, utilization of resources, quantity and quality management, duration of an operation were the essential aspects. Therefore, all the aspects can be managed effectively with its framework. 

Contract expiry 

A contract expires when all the parties meet their obligation. This is the stage of completion of the construction of the Scottish parliament where all the parties involved have done their duty. 

Risk Assessment

The objective of risk assessment is to recognize different available risks and emerging risks in the project work. Risk management is essential to making policies regarding risk management. In a project work mainly there are two types of uncertainties that are analyzed: those aspects are external and internal. 

A project manager has control over the internal environmental uncertainties of the operations. These uncertainties consist of schedule, work effectiveness, interpersonal relationship, workplace environment, cost management, utilization of resources, and others. In addition, a project manager has no control over the external environmental uncertainties and these factors do not come under the project umbrella. The external environmental uncertainties consist of legal aspects, suppliers, creditors, competition, and others. In the risk assessment, a project manager mainly applies two approaches for risk identification (McHarg, A., 2018). The first approach is to recognize the main cause of risk - in this assessment; a project manager analyzes some unfavorable events in the work environment and the impact of those events in the operation. Another approach is to identify the emerging risk in all the important functions that are essential to meet the desired objectives of the project. Some risks can harm the project work those are as follows: 

Financial risk

Financial risk consists of the contractual risk regarding credit, liquidity, organizational assets, and others. In this dimension, all the financial risks are analyzed before making a contract and for breaching a contract (Perez, 2019). In the context of the construction of the new Scottish parliament, Mr. Wyllie was the head of the control group of the parliament building and the construction work. In this construction work, the estimated cost for 15000m2 was around 40million British pounds. In addition, due to increasing the operation period in the next year, this cost has grown up to 50m British pound. Therefore, this report shows that a deadline missing may harm the financial aspect of the project. In addition, in the context of a purchase order of raw materials, an organization may face financial losses due to missing the deadline of contact delivery date. in the context of bills of exchange, the drawee may not be the amount on the due date that may impact the business operation. Poor visibility can be the main cause of the financial risk of a project. Poor Visibility: Sometimes a company faces financial damages due to poor visibility on the obligations of parties in a contract, deadlines, and other aspects. In this dimension, the contract life management framework can be essential in enhancing the visibility of contracts by proper management over all the activities of a contract lifecycle. The activities include approvals, execution, prominence inspection, and others. 

Legal Risk

In this dimension, a contractual framework shows the available risk in a contract if the organization fails to do its duty. In the context of breach of construct an organization may face some legal consequences such as penalties, compensations. Legal risk is a kind of external uncertainty. In the context of the construction of the new Scottish parliament, ineffective risk management brought several risks in the project work regarding budget and increasing operational time. Therefore, a project manager must focus on legal aspects to meet the objectives of the contract. 

Mitigation Strategy

A Contractual life management framework shows the process of mitigating the risk of the contract. In this dimension, it shows the impact regarding financial losses due to a breach of contract by the other party (Wahid, 2018). This framework shows the process of compensation claims if a party does not do the duty as per the condition of a contract. Apart from that, an organization can inspect all the areas of lawful consideration of a contract for mitigating the risk regarding financial losses. In the context of the construction of the new Scottish parliament, an effective risk mitigation strategy is required for controlling over budget and managing internal and external uncertainties. In addition, in the context of handling a megaproject, it is difficult to manage all the uncertainties therefore tasks can be transferred to contracts to reduce the risk. A risk reduction strategy is an essential strategy to respond to risk. In this segment, all the internal and external uncertainties are identified (Churchill, 2018). Apart from that likelihood and the impact of each uncertainty are evaluated. In the internal uncertainties risks may emerge due to improper budget estimation, improper utilization of all the resources, ineffective work environment, missing of a deadline of an operation, negligence of a party, and others. In this dimension, a project manager should consider all the aspects to reduce the level of risks in mega project work. In addition, in a megaproject, a project manager needs to build strategy regarding budget control, estimation of future budget, optimum utilization of resources, transferring the tasks to contractor, and others. In the context of the strategy of mitigating risk in a megaproject, a professional consultant is required to be appointed for managing the construction cost and effective budget estimation. A megaproject work may also get harmed due to external uncertainties. In addition, to adjust the project work with the external factors a project manager must deal with all the political and legal aspects related to the contract effectively. 

Recommendation

In this report study, it has been found that the contractual life management framework helps an organization to monitor all the activities of a contract. In the case study of the construction of the new Scottish parliament, it has been found that the holy rood construction strategy was adopted in that project. In this project, it has been observed that the project manager failed to control the available and emerging risk in the project properly. In mega project work, the project manager can't control the internal uncertainties and external uncertainties. To minimize the level of risk in the project work, tasks are required to be transferred to contractors (Szkwarko et al. 2018). It is suggested that in a contract a party needs to focus on the desired outcome. Therefore, a project manager has the main task is to focus on the overall operational efficiency to gain an optimum outcome. Furthermore, the strategy should be leaving no gap regarding legal aspects and political aspects so that project work does not get harmed due to any external uncertainties. It has been found that a contractual life management framework is essential in making an effective strategy for making a contract with some parties. It is recommended that a proper understanding regarding transferring risks is essential for bringing an effective result. It has been found that the main cause of the failure of a megaproject is ineffective risk management. In this dimension, the future contingency evaluation method can help analyze and mitigate the risk. In addition, it helps a project manager to control the budget of the project. Two aspects that have been identified regarding budget are an ineffective budget estimation and improper utilization of resources. In the context of the delivery of goods, a business needs to consider the right of an unpaid seller so that the business does not face any financial losses (Josefsen, 2019). Apart from that, all the clauses are required to be considered before making a contract. Furthermore, a business needs to inspect all the areas of law before making a contract. In addition, in the context of missing an aspect contract can be invalid that may cause financial damages in the future. 

Conclusion

In this study of the report, it is concluded that the contractual life management framework is managing contact activities from the initiation of the contract to the expiry. It has been observed that in a mega project the main task of a project manager is to assess the risk. In the aspect of the construction of the Scottish parliament, some uncertainties occurred due to ineffective risk management. In this megaproject, risks occurred due to estimation of budget and increasing the operation time. Therefore, a professional consultant is required to be hired for minimizing the risk in a megaproject. it has been observed that a project manager should not leave any legal and political gap during making a contract of a megaproject. It has been found a business involves several commercial contracts for sourcing and to fulfill the needs and wants of the customers. A business deals with a different contract and legal aspects such as the delivery of goods, unpaid seller, bills of exchange, bailment, and others. Therefore, at the time of making a commercial contract, all the clauses of the contract and all the areas of lawful consideration are required to be focused on for the smooth functioning of a contract. It also has been found that a business has some financial and legal risks due to make a contract and for the breach of a contract. Therefore, this framework is essential in assessing different business risks so that maximum efficiency can be achieved for a legal relationship. A contractual life management framework helps a business to make a mitigation action to gain optimum results from a contract and to fulfill the objectives of the business. Finally, it can be said that the contract lifecycle management framework is essential in managing all the functions of a contract to bring an optimum outcome.

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