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14 - CMN - Contract Management and Negotiation Skills


CMN 142 - Cost Control and Procurement, Tenders and Contract Management (10 Days)

Code Start Date Duration Venue
CMN 142 15 August 2022 10 Days Istanbul Registration Form Link
CMN 142 10 October 2022 10 Days Istanbul Registration Form Link
CMN 142 05 December 2022 10 Days Istanbul Registration Form Link
Please contact us for fees

 

Course Description

Organizations target for their projects to be successful and to meet client expectations as well as their internal objectives. Cost control is the process of measuring cost variances from the baseline and taking appropriate action, such as increasing the budget allocated or reducing the scope of work, to correct that gap. Cost control is a continuous process done throughout the project lifecycle. The emphasis here is as much on timely and clear reporting as measuring.

The course describes how to deal with key contractual liability issues and how to allocate risk to minimize the exposure on an organization from the schedule delays and cost overrun perspective. The course also covers tools, tips, and techniques on effective resolution of disputes to minimize cost and reputational risk exposure to any organization. 

Procurement of goods and services are counting the substantial portion of project budgets from the owner’s perspective, particularly where it involves a global supply chain network as it is the case with most of today’s industries and sectors. Hence, executive management everywhere is determining that Managing Tenders, Specifications, and Contracts must emerge as a critical core competency if organizations are to increase revenue. Using internationally accepted principles and practices through the tendering and procurement process as well as in contract management is critical to ensuring cost and process efficiencies to any organization.

Course Objectives

  • Set clear expectations with stakeholders
  • Control scope creep due to transparencies established with the customer
  • Track progress and respond with corrective action at a quick pace
  • Maintain expected margin, increase ROI, and avoid losing money on the project
  • Generate data to benchmark for future projects and track long-term cost trends.

Who Should Attend?

  • Project Sponsors
  • Project Managers
  • Contract Managers
  • Procurement Managers 
  • Sales and Marketing Professionals 
  • Tendering Managers

Course Details/Schedule

Day 1

  • Procurement and contracting strategy
  • Elements of procurement best practice
  • Project delivery types 
  • Risk assessment
  • Balancing risk through contract strategy

Day 2

  • Developing the scope of work and specification
  • Selection and evaluation criteria
  • Cost and price analyses
  • Ancillary documents and issues
  • Negotiation tools and techniques

Day 3

  • Key elements of the contract
  • Principal performance obligations
  • Scheduling and completion
  • Liabilities, indemnities and insurance
  • Ownership and risk
  • Pricing and payment
  • Governing law

Day 4

  • Force majeure
  • Termination and suspension
  • Liquidated damages
  • Types of bonds & guarantees
  • Managing contract changes and performance failures
  • Types and assessment of claims

Day 5

  • Implications of varying performance
  • Performance based contracting
  • Alternative dispute resolution 
  • How contracts may end
  • Contract close out

Day 6

  • Cost, expense and budget relationship
  • Role of cost management and budgeting for managerial decisions
  • Cost terminology, types and components of costs
  • Types of budgets

Day 7

  • Cost drivers
  • Cost allocation and apportionment
  • Standard costing calculation
  • Activity-based costing calculation
  • Cost and quality

Day 8

  • Building a master budget
  • Flexible budgets
  • Budgetary control and variance analysis
  • Role of finance in cost control: key performance indicators
  • Balanced scorecards: strategic-based control

Day 9

  • Cost behavior analysis
  • Role of cost in pricing, full and marginal costing pricing
  • Break-even and target income
  • Sensitivity analysis

Day 10

  • Time value of money 
  • Cost of capital and hurdle rate for capital projects
  • Valuation technics (net present value, internal rate of return, payback period)
  • Probability models to evaluate projects (Monte Carlo simulation, stress tests and value at risk models)