Contract Management and Executive Summaries

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    • #292525

      This SIG Member from the Buy-side is interested in how you summarize your final sourcing decision, contract details and terms for your stakeholders just prior to the final signature. 

      Currently at their organization the Executive Summary is used to help socialize contracts with signatories before they are sent out for signature. This Executive Summary also accompanies the final contract as it makes its way through internal signature (it is not shared with the vendor). They currently distribute this summary in a document (maximum of two pages) and presentation deck (two slides). 

      This Member is interested in knowing: 

      1. Do you require an Executive Summary with your contracts?

      2. Is this for all contracts or are there certain parameters to trigger this summary, such as those that have a certain dollar value, risk level and/or type (e.g. SOW, MSA, other types)?

      3. What is your process when drafting this document – does procurement draft it, does the business team, both?  

      4. What format do you use (Word, PPT, other)?  

      5. Is the document shared before and/or during the signature process?  

      6. And if it is shared, is it the responsibility of the analyst to share the document with all signatories (including C-Level executives) or is it the responsibility of management/leadership?

      Of course, this Member would appreciate any examples and SIG will gladly scrub and remit for your approval before sharing. Please send to [email protected]. Thank you in advance

       

    • #295351
      Anonymous
      Guest

       

      1.An executive summary is redundant if stakeholders were involved in the sourcing process from the very beginning. 

      2.Appears to me a subject for corporate governance, rather than procurement.

      3.Terms and conditions were probably negotiated during the negotiation cycle, starting with an SoW, if one is issued. The RFP responses probably would form the basis of any negotiations, and the T&C’s would have been negotiated with stakeholder(s) as well as legal representation.

      4.At my company, we have a. a contract builder tool, where we have a drop-down menu of “contract heavy) and “contract light”

      5.“Contract heavy” is deemed appropriate where the deliverables are ambiguent – think consulting, any BPO/ITO, or any contract where the risk is deemed to be high

      6.Typically, “procurement” seems to be relegated to tasks that stakeholders can’t be bothered with – so yes, ensuring the right signatures are obtained at the right times.

       

    • #295352
      Anonymous
      Guest

      I have been involved with contracts in two UK environments: Agriculture and Public Sector Healthcare.

       

      The approach has been very similar for both, once the spend is approved e.g. business case – the budget holder/sponsor becomes the owner of the project and it would not be required to represent the contract or its merits to senior management/board for final sign-off.

      The board would only be concerned with contracts pertaining to items/ authorities not delegated to other parts of the business.

      Thus none of the outlined steps or additional time by senior leaders are required to revisit the scenario.

       

      Budget holder/sponsor is fully supported by the Legal or Procurement Department to guide the acquirer. While the whole contract and annexes are provided and clarified if required, it would not be anticipated that the acquirer would be involved in drawing up every contract clause. Emphasis is specific in designing the request for purchase (RFP and test) and in the contract variables and deliverables that are concerned with the goods or services.

       

      Technical sign-off after the selection process has been completed is by the budget holder/sponsor.

      Legal sign-off and contract management was responsibility by either Legal or Procurement Department, with only the acquirer/sponsor receiving a signed copy for their department.

       

    • #295353
      Anonymous
      Guest

      1. No, only $2.5M +
      2. See above
      3. Procurement.  I do not think this is a good practice; the business owns the budget, and it should be a joint responsibility.  Sourcing owns the negotiation/contracting/etc. – the process itself.  They do not own the decision – that is the business owner. 
      4. Word – the ES is collected by a centralized sourcing contact each week; that contact organizes them by senior leader and provides each senior leader with their ESs for the week.  Each ES is a paragraph with about ten questions – Supplier name, contract term, any non-standard terms, overview, spend, etc.  Our legal, compliance, risk, infosec, etc. signoff is managed through a different process, so once we get to the phase where the ES comes into play, everything is fully vetted and approved as required.  The ES is only for the funding commitment.
      5. Before – to the senior level (CEO reports) prior to a contract running for financial approvals. 
      6. Sourcing handles sending to the Senior level (direct reports to the CEO); business is responsible for vetting with leadership up to that point and at their discretion.

    • #295354
      Anonymous
      Guest

      We are just working on our contract governance.  Currently we have an Excel cover sheet that states not to exceed amounts (total contract value), purpose, requestor and cover signature page.

      It’s in development but procurement will construct with the contract it routes for approvals.

       

    • #295355
      Anonymous
      Guest

      1.Do you require an Executive Summary with your contracts?  – Yes, we use SCM Connect and all of our contracts require Executive Summaries.

      2.Is this for all contracts or are there certain parameters to trigger this summary, such as those that have a certain dollar value, risk level and/or type (e.g. SOW, MSA, other types)? – All Contracts

      3.What is your process when drafting this document – does procurement draft it, does the business team, both?  – Drafted by the Procurement group

      4.What format do you use (Word, PPT, other)?  – part of SCM Connect 

      5.Is the document shared before and/or during the signature process?  – during Signature process

      6.And if it is shared, is it the responsibility of the analyst to share the document with all signatories (including C-Level executives) or is it the responsibility of management/leadership?  – setup in SCM Connect to flow to the correct parties by Business Unit or Cost Center

       

    • #295356
      Anonymous
      Guest

      I normally write a Recommendation to Select document which articulates the entire sourcing process, from receipt of bids, number of bids, evaluation process, evaluation scores, reference checks, probity checks, financial checks. Procurement normally draft it, being consensed by the rest of the business. This document is only for major sourcing events, not small RFQ’s. It is normally approved before the contract is drafted. It is the responsibility of Procurement to obtain the necessary signatures.

    • #295357
      Anonymous
      Guest

      1.Do you require an Executive Summary with your contracts? – yes for some stakeholders

      2.Is this for all contracts or are there certain parameters to trigger this summary, such as those that have a certain dollar value, risk level and/or type (e.g. SOW, MSA, other types)? – most of the contracts require this

      3.What is your process when drafting this document – does procurement draft it, does the business team, both?   We use templates

      4.What format do you use (Word, PPT, other)?   – word

      5.Is the document shared before and/or during the signature process?   – yes

      6.And if it is shared, is it the responsibility of the analyst to share the document with all signatories (including C-Level executives) or is it the responsibility of management/leadership? – responsibility of Procurement

       

    • #295358
      Anonymous
      Guest

      1.  Yes, my client has a set format in Excel with necessary drop down lists to select from and free text note to add inputs.

      2. For Spend above USD$50,000.00 be it SOWs, Fixed Products & Service Agreements, Amendments or MSAs an exec summary and final copy of the contract/sow doc is needed. Lower of $50K needs PO with a approval note from sourcing manager.

      3. drafted by Procurement with due diligence inputs, commercial value and outcome. Reviewed by business, and approved by senior leadership in Procurement.

      4. MS Excel. Once approvals in place of then convert to PDF.

      5. before the signoff through DocuSign. It needs a review by Business and approval from sr.procurement leader.

      6. Sourcing Manager shares it with Business sponsor(confirming acceptance) and then with Sr. Leadership in Procurement.

       

    • #295359
      Anonymous
      Guest

      1. Yes

      2. This is required for all contracts

      3. Sourcing drafts the document 

      4. This is integrated into our contract management system, Zycus 

      5. This can be shared during the signature process

      6. All contract approvers are provided the summary during the signature process.

      The template questions are very simple, and  it’s up the Sourcing manager to enter complete data (for example, a full description of the pricing model, savings achieved, any material negotiation points). If a contract has significant exceptions, these will be presented as a separate document for approval.

       

      Template questions:

      Vendor name – 

      LOB contact – 

      Requested by date (date the contract is requested to be signed by) –

      Project summary (can be pulled from business case) –

      Type of data that will be shared –

      Subcontractors – list type of services and location of subcontractor 

      Additional documents – 

       

    • #295360
      Anonymous
      Guest

      Response below–this is how I handle this within my dept and I am not part of the global sourcing group–

      Member is interested in knowing: 

      1.Do you require an Executive Summary with your contracts? We used to do more of this then when COVID hit we went to docu sign and got away from it–my intent with the executive summary was to let my VP know at a high level what the project/service was

      2.Is this for all contracts or are there certain parameters to trigger this summary, such as those that have a certain dollar value, risk level and/or type (e.g. SOW, MSA, other types)? We did it for all contracts at 1 point, 

      3.What is your process when drafting this document – does procurement draft it, does the business team, both?  I did for my projects

      4.What format do you use (Word, PPT, other)?  I created an excel form that was a high level document and showed #’s

      5.Is the document shared before and/or during the signature process?  During it was attached to the contract

      6.And if it is shared, is it the responsibility of the analyst to share the document with all signatories (including C-Level executives) or is it the responsibility of management/leadership? I share with my VP and if it needs to go further, he will take it and edit it and share it if needed

      Again, this is my personal/dept process I am not part of the global sourcing group. Also, within my dept my VP is very tied into what we are doing so the form was used for a quick recap–

       

      Contract recap sheet 

        

        

      Contract type to signAmendment , MSA, Purchase 

      Contract end date 

      Original date of contract/how long have we been using this Supplier? 

      Increase or Decrease Amount 

      Spend amount

      Did we bid or negotiate 

        

      Who was involved in recommendation? 

        

        

      Explanation/Thought process 

        

        

       

    • #295361
      Anonymous
      Guest

      1.Yes.  However, I am unable to share neither a template nor example at this time.  The Executive Summary (addressed to the executive signing the contract) includes:

      •Brief summary of the services offered in the contract

      •Contract Amount

      •Term of contract

      •Number of optional renewal periods

      •Concerns about the contract (e.g., nonnegotiable clause such as indemnity)

      2.Yes, for all contracts because all contracts are signed by executives only.  This provides a summary of what the contract is about versus them reading through the contract or SOW.

      3.Legal team drafts the document.

      4.Word to executive

      5.No, not shared at moment but will be shared with TPRM in near future.

       

    • #295362
      Anonymous
      Guest

      Yes,  We require a summary document for the signing of ALL Agreements.   We call it the Signature Authorization Form.   It provides background into the event, key contract terms; length, total dollars, savings (if any associated), value add, payment terms, impacted region/site/s, etc.   It also requires the author to share deviations from expectations from our standard terms; liability, warranty, quality, etc…    From there we have a signature box with names in ascending order of signature authority beginning with the Legal support person, procurement lead and Stakeholder, from there, the names keep being added until we hit the final signature.  That is the person who will then be the signee of the actual agreement..     

    • #295363
      Anonymous
      Guest

      1. Yes, but only for contracts over $5M

      2. Only for contracts over $5M

      3. Typically procurement with business input

      4. Word

      5. Reviewed prior (2-4 weeks depending on level of leadership) but also attached when going out for signature

      6. Usually business shares with business and finance leader signatory and procurement with procurement leader signatory

    • #295364
      Anonymous
      Guest

      1.Do you require an Executive Summary with your contracts? Yes, absolutely. Whilst the procurement professional will understand the contract/work package, the senior stakeholders that are going to need to sign off the contract will not have full background, nor the time to learn about the background.

      2.Is this for all contracts or are there certain parameters to trigger this summary, such as those that have a certain dollar value, risk level and/or type (e.g. SOW, MSA, other types)? Contract value is usually a good tool to use as a filter, purely because it is objective. I find that trying to categorise contracts by risk level and/or strategic importance is very much open to ambiguity.

      3.What is your process when drafting this document – does procurement draft it, does the business team, both?  I would always recommend that procurement be the owners and draft it. This is one way of ensuring that procurement a) gets involved in the early stages of a new contract tender, and b) truly needs to understand the contract

      4.What format do you use (Word, PPT, other)?  Either Word, Excel or PPT, depending on level of wordiness or numbers needed

      5.Is the document shared before and/or during the signature process?  In a well defined process, it is not necessary to share beforehand

      6.And if it is shared, is it the responsibility of the analyst to share the document with all signatories (including C-Level executives) or is it the responsibility of management/leadership? I would strongly encourage the procurement/sourcing analyst to share with the signatories as this will give them exposure to senior management.

       

       

      A key factor is that the procurement analyst should always aim to show the financial payback or benefit of the contract that is being recommended for signature, or if there is no tangible benefit, then at least show what the next best option is.

       

    • #295365
      Anonymous
      Guest

      1.Do you require an Executive Summary with your contracts? I am not sure what is meant by executive review, but we indeed do a formal review/approval. 

      2.Is this for all contracts or are there certain parameters to trigger this summary, such as those that have a certain dollar value, risk level and/or type (e.g. SOW, MSA, other types)? All contracts regardless of their dollar value must go through our electronic contract portal

      3.What is your process when drafting this document – does procurement draft it, does the business team, both? Sourcing facilitates the contract review (internal and external) The business will be included to confirm the business terms that will impact them 

      4.What format do you use (Word, PPT, other)?  Use word during negotiations, submit as a PDF for the final copy. 

      5.Is the document shared before and/or during the signature process?  Correct, the document is shared before and after 

      6.And if it is shared, is it the responsibility of the analyst to share the document with all signatories (including C-Level executives) or is it the responsibility of management/leadership? Our electronic contract management system generates an approval flow that includes all management/leadership that needs to be included based on the dollar value threshold. Once its fully approved, sourcing gets a notification to execute the DocuSign 

       

    • #295366
      Anonymous
      Guest

      1. No

      2. Yes

      3. A standard contract is used for all vendors with LOB review and final redline approval from corporate legal.

      4. Word

      5. Yes

      6. The document is sent to the signatories by vendor management.  

    • #295367
      Anonymous
      Guest

      Our process is kinda backwards.  We require an executive summary as part of the PO, but not the contract.  So it’s basically a justification after the fact.  We are trying to fix it during our current process upgrade but we haven’t decided on particulars yet.

       

    • #295368
      Anonymous
      Guest

      1. Yes

      2. For all

      3. There is a template in the database; procurement fill this form, both the client department and the buyer sign.

      4. Word

      5. Yes

      6. Anyone with the delegation authority can access to this document.

    • #295369
      Anonymous
      Guest

      1. Yes

      2. ALL CONTRACTS EXCEPT PURCHASE ORDERS

      3. PROCUREMENT SRAFYS WOTH THE HELP OF LEGAL TO DOCUMENT MATERIAL CONTRACT RISKS and FINANCE REVIEWS THE SPEND AND SAVINGS. 

      4. Word

      5. DURING THE CONTRACT SIGNING APPROVAL PROCESS. 

      6. ALL APPROVERS AND ACKNOWLEDGERS ARE SHARED A COPY OF THE CONTRACT AUTHORIZATION FORM DURING THE APPROVAL PROCESS. 

    • #295370
      Anonymous
      Guest

      Member is interested in knowing: 

      1.Do you require an Executive Summary with your contracts? For a while we were requiring for all – it has now backed down to being required within certain parameters.  Our Contract system automatically creates one, but we only are required to route it for signatures when certain criteria are met.

      2.Is this for all contracts or are there certain parameters to trigger this summary, such as those that have a certain dollar value, risk level and/or type (e.g. SOW, MSA, other types)?  Contract Summary Process:

      •Purpose: To highlight contractual risks and financial obligations, and to ensure alignment from Bus

      •When Needed: For all “mitigating factors” deals or if spend is over $200K – per 3rd Party Engagement Policy

      oMitigating Factors:

      Financial impact or long-term exposure

      Contractual gaps outside of standard

      Supplier Risk: reputations, financial, etc.

      BU did not engage us timely, or negotiations outside of our oversight

      Complicated deal structure or obligations

      PI or other security/privacy considerations or risk

      •Contract Summary Routing: 

      $$ AmountStrategic Sourcing & ProcurementBusiness UnitOther

      AnyPreparer & Their managerProject/Budget owner

      VP/SVP+ Signatory

      If over $500KDirector

      If over $2.5MSS&P VP Legal & Finance

       

      •Things to Consider:

      o- SOW value

      oCompleteness of info

      •Valuation of the document over life of contract – exceptions for high spend or strategic suppliers 

      •All contracts must be signed by a VP or higher rank (regardless of dollar amount) of the BU controlling the project budget.

      3.What is your process when drafting this document – does procurement draft it, does the business team, both?  Procurement Drafts it – format is within our contracting system and the majority populates as you provide the information to the system.  Important to dialog with the BU so that everyone is one the same page regarding the content so there are no surprises when it is routed for signature.  This is SS&P’s opportunity to make sure everyone is aware of any issues, mitigating factors, complications, non-standard agreements, unusual risk, etc.  Also, any important notes for future or continued engagement with supplier.

      4.What format do you use (Word, PPT, other)?  Word – then route via DocuSign – if done correctly it is autosaved as part of the contract record.

      5.Is the document shared before and/or during the signature process?  It is the SS&P Manager creating the document to socialize with their line and to make sure their BU partner is aware of what is in it and who from their line will need to sign  The BU partner should socialize with their leadership who will be signing.  

      And if it is shared, is it the responsibility of the analyst to share the document with all signatories (including C-Level executives) or is it the responsibility of management/leadership

       

    • #295443

      We utilize a contract authoring tool for review, negotiations, authoring and signatures to every third party contract document. Each party which plays a role in the contract drafting and finalization including supplier are stakeholders in the system and need to approve the final version of the draft as part of a system based workflow. Since the workflow is system driven, procurement can only execute a document upon completion of necessary approvals as decided by system based on nature of contract document being worked upon.

       

      1. yes, this is a mandatory step as part of the system driven process as mentioned above. Upon finalization of the draft, contract manager need to update certain fields in a system define template which is finally downloaded as a summary of transaction report. This document is sent along with the document to all signatories (only internal and not to supplier signatories) so they can refer this document for all key info about the contract.

      2. this applies to any document being executed via the contracting tool however the level of information in summary document may vary based on document type being executed

      3. it is a system defined template. Level of information/number of fields vary based on contract type and other parameters selected while initiating the request. It’s a smart system that conveniently captures the key fields however the end user/contract manager still has option to add custom fields if required. 

      4. pdf, non-editable 

      5. only upon finalization of draft, this document is generated and goes to all stakeholders who approve the draft as part of system workflow.  

      6. analyst bears the entire responsibility.

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