Blogs & Thoughts

Software Solutions and Contract Management - The Perfect Pairing

Contracts. We all work with them. In your years in business, it’s likely you will have navigated multiple contracts – either for a service you have provided, or received. Whatever the contract is, it needs to be managed, both from a client or contractor perspective.

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  • Date: 10th May 2023
  • Author: Miguel Montenegro
Facilities Management Consultancy Services

Managing a contract can be done in many ways – physical paperwork, spreadsheets, databases, software solutions, and so on. It’s up to you how you choose to manage your contracts – there is no right or wrong – the only wrong move is not managing it.

I have of course, experienced both software solutions and paper work as means of managing contracts over the years, and as I said, it is a personal choice. But as an accredited Service Manager for NEC4 TSC contracts, I know there are many pros to using software like NEC for contract management, so let me explain those, and a little more about NEC contracts.

NEC contracts were developed initially for the construction industry back in 1993, but thanks to their success, the system expanded into other areas, including Facilities Management and celebrates an impressive 30 years in business this year.

Of course, it’s not a magic wand – you can’t just expect the software to do all the work for you. As with any other form of contract management, contracts require input and active management, an essential element in any contract to ensure its success.

You cannot leave the contract to run itself, or rely solely on your supplier or client. If you do, you will almost certainly have problems or disputes in the future.

Security and transparency are key in contract management, particularly in case of potential disputes. Over the years I have developed several spreadsheets and databases to run this software as it should be run (my team know that I love working on spreadsheets!), but I am aware that even with the strongest security measures, it can be broken, modified, or easily deleted.

In a changing workplace, with people using more varied platforms, like Teams and SharePoint, this could be a concern, for example, if the project manager uses Teams, but the contractor only uses email. Tracking all documents is essential, and this is something that NEC promotes – all time stamps, records, communications and the likes have a date on them.

There are already several solutions for contract management on the market. Take your time to look for the one that accommodates your individual requirements, considering things like budget, staff and any other minimum requirements. I have done this exercise for many different clients in many different industries and the one thing in common every time – is time! It’s never a one day job!

In the market there are a couple of solutions for NEC – some purely for contract management, and others with a mix of project solutions which incorporate NEC support. All of these work in a similar way, taking into consideration the core clauses of NEC, plus your options – remember the X and Y clauses from my initial NEC blog.

The benefits of NEC software are many – it provides a robust structure for communications, is always accessible, and most importantly, is difficult to break.

Let’s break down the basics.

  • Templates are ready to use on the system
  • Workflows follow the literature on NEC which is useful for connecting the correct clauses
  • Time-bound is always through the system and is adaptable if you modify the original NEC documentation.
  • Roles and Responsibilities are defined
  • Financial limits can be added to the workflows
  • Identification of who is responsible for the actions at any time – Client/Contractor
  • Information is always accessible. Anyone with access to the system will see the real status o the contract – Financials, Works, Early Warnings, Compensation Events, etc.
  • Correct understanding of your contract with you own data.

In conclusion, I would say that a software solution will reduce the administrative burden of filling spreadsheets and chasing for answers. Everything is on one screen and easy to follow. It will also reduce the commercial risk as it will notify you when you are due for answers – this is contract compliance.

But please do remember that a software won’t work by itself – you still have to provide input into the system. If that input is good, the results will be good. Conversely, if it’s not, you could have problematic results for either party.

SPACE FM is a centre for excellence on NEC. We run contracts on behalf of clients, and support contractors to get it right.


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