Contract Manager Job Description, Skills, and Salary
Get to know about the duties, responsibilities, qualifications, and skills requirements of a contract manager. Feel free to use our contract manager job description template to produce your own. We also provide you with information about the salary you can earn as a contract manager.
Who is a Contract Manager?
Contract management is a term that is frequently used in procurement or purchasing departments. The manager negotiates, accepts, and signs contracts with suppliers of goods and services to the organization as part of the procurement department’s responsibilities.
Effective contract management practices result in lower operating costs, more efficient services, and a more favorable bargaining position in the subsequent round of negotiations. Contract management entails ensuring contract compliance, serving as the primary point of contact for service and dispute resolution issues, as well as managing any payments or contractual clauses. Contract management, in general, can be divided into three distinct areas: thresholds, rebates, and performance clauses.
A threshold is a term that refers to specific dollar spending, transaction, or unit purchase targets. These thresholds are frequently associated with dollar discounts on the purchase price and are frequently determined by the number of orders received during a specified period. Thresholds are frequently used during the negotiation process to obtain even deeper discounts than the supplier would normally provide. As volume increases, the supplier is motivated and able to lower prices as its costs decrease.
Rebates are used to compensate or incentivize suppliers to meet specific goals. For instance, a bakery may bargain for a specific quantity of flour over a specified period. Any additional, unscheduled requests that are completed within a specified time qualify for a supplier rebate. While the invoice is for the standard amount, the rebate is calculated and returned to the supplier as compensation for meeting an immediate need. This type of flexibility is frequently required in time-critical environments, where the contract specifies a standard delivery schedule but additional flexibility is required to meet business requirements.
Performance clauses are based on quantifiable metrics that are critical to the business’s operation. Common clauses for construction projects include those requiring delivery within a specified time frame, invoicing within a specified date range, meeting benchmark delivery dates, and a percentage of completion. A performance clause’s purpose is to establish an agreed-upon method of measurement between the supplier and the customer. Depending on the industry, these clauses are frequently linked to penalties or rewards.
Effective contract management entails tracking daily activity, monitoring supplier performance, and following up with the supplier. Only through an active contract management process is it possible for the company to claim any contract benefits. These benefits could include clauses allowing for early release, additional payment reductions, or other penalties.
A contract manager is responsible for managing the written agreement between a business and a vendor. The manager is permitted to work on both sides of the contract. Since this position is used in a variety of industries, including for-profit businesses, non-profit organizations, and government agencies, the duties and scope of the job may vary. In general, a contract manager is responsible for the execution of the contract and ongoing communication with the other party. Specific responsibilities may include file maintenance, financial reporting, and contract term monitoring.
Numerous types of businesses and organizations employ outside firms to complete tasks that are not feasible to complete in-house. These businesses are hired as third-party vendors and agree to abide by the terms of a written agreement. Typically, these written agreements span an extended period, sometimes years, and serve as the foundation for an ongoing relationship that must be closely monitored to ensure that both parties receive what was promised in the contract. Additionally, the relationship must be managed to ensure that the project adheres to contract specifications and that personnel changes do not cause operations to be disrupted.
Additionally, each contract is unique. There is no single standard vendor contract that contains the same terms for all parties. The contract manager treats each contract as a distinct entity with its own set of terms and conditions. Typically, he is assigned to negotiation after the terms have been agreed upon and is initially responsible for completing and delivering all of the paperwork. Once the contract is operational, he serves as the contract’s administrative point person until the contract is terminated.
Contract administration can include a variety of specific responsibilities, depending on the nature of the engagement. The contract manager is in charge of communication between the parties, including status updates on progress toward objectives. In many cases, he will serve as the contract’s chief compliance officer, conducting site visits and performing spot checks to ensure nothing unusual is occurring. Typically, the contract manager is in charge of the expense budget, which includes tracking expenditures, collecting receipts, and coordinating with the finance department to generate financial reports.
Additionally, the contract manager is responsible for contract deviations and change management. If the vendor loses key personnel or a budget modification requires approval, the contract manager handles the details to ensure the project continues to run smoothly. Typically, he is responsible for periodic contract reporting that informs stakeholders about the status of work completed under the contract.
Contract Manager Job Description
Below are the contract manager job description examples you can use to develop your resume or write a contract manager job description for your employee. Employers can also use it to sieve out job seekers when choosing candidates for interviews.
The duties and responsibilities of a contract manager include the following:
- Preparing client tenders and commercial bids to assist in the acquisition of new business
- Creating and presenting proposals for projects
- Consulting clients to ascertain their requirements
- Developing plans and establishing budgets and timetables
- Establishing budgets and timelines with clients
- Managing schedules and budgets for construction
- Taking care of any unforeseen costs
- Participating in site meetings to keep track of progress
- Serving as the primary contact for clients, site managers, and project managers
- Collaborating with third parties to ensure that everyone is clear about their respective roles and responsibilities
- Assuring that construction projects adhere to agreed-upon technical specifications
- Coordinating activities with technical and financial staff, subcontractors, legal teams, and the client’s representatives
- Supervising the invoicing process after a project
- Creating, evaluating, negotiating, and executing a diverse range of contracts encompassing a variety of transactions.
- Establishing and maintaining relationships with suppliers and acting as the single point of contact for contract-related issues.
- Maintaining records of correspondence and documentation on existing and pending contracts.
- Informing and educating stakeholders about all contract-related issues.
- Monitoring contracts and deciding whether to close them out, extend them, or renew them based on the company’s best interests.
- Resolving any contract-related issues that may arise with third parties or within the company.
- Creating and revising a variety of customer contracts
- Assuring the accuracy and upkeep of the organization’s internal contract documents
- Advising and guiding various teams on contract generation
Qualifications
The credentials required to become a contract manager vary according to the role and company for which you are applying. While contract manager positions typically require a bachelor’s degree, some employers may specify that law degrees, in particular, are required. In some instances, businesses may require contract managers to be certified, but this is not typically required.
Essential Skills
- Innovation and Technology
We are no longer in the dark ages. Thus, the era of manual processes, paper-based agreements stored in filing cabinets, and spreadsheet management have come to an end. To be sure, this may remain wishful thinking. Several of you may have squirmed as you read the preceding sentence. To be honest, we are in the midst of a digital transformation. Although not quite there yet, the legal profession and the contractual sector are beginning to embrace significant new technologies such as contract lifecycle management (CLM).
Contract managers must stay current with technology. Additionally, we need to be aware of improved processes and methods for managing our agreements. It is not necessary to constantly be on the cutting edge, but it is critical to have an innovation mindset. That is an openness to new methods and technology that can help the company increase speed, decrease processing times, and improve the quality of its agreements.
- Exercise control over agreements
Interpersonal abilities, networking, and strong collaborative relationships are critical. Having a pulse on your agreements – arguably – is a critical skill and capability. It is not explicitly a contract process, nor is it about being familiar with every set of terms and conditions contained in every agreement. Rather than that, it is about combining disparate skills. It’s about being aware of changes to your organization’s internal policies, standard clauses, and critical terms. Equally critical is maintaining an eye on external factors such as governing policies and changes in contract law.
Technology can also be beneficial in this situation. Analyzing your agreement base is one way to keep an eye on your contracts. This provides you with information about the averages, standards, peculiarities, and outliers. It is a component of sound risk management to stay on top of these issues and to continuously improve the consistency of your agreements.
Additionally, do not overlook the importance of understanding regulatory and governance issues unique to specific industries. This is particularly true in the healthcare, public sector, insurance, and financial services industries.
- Communication and management of projects
There is no surprise here. Once the dust has settled between the parties, stakeholders must be informed about the transaction. However, the organization must be aware of the various expectations on both sides, as well as the associated obligations, performance metrics, and any potential compliance issues.
The project management elements are inextricably linked to communication. Naturally, this includes ensuring that issues are followed up on, that continuous monitoring occurs, and that performance audits occur. For many industries, assessing and scrutinizing deliverables requires the collaboration and coordination of numerous specialized teams.
- Negotiation
Negotiating with third parties and vendors is not solely the responsibility of the General Counsel’s office. Without a doubt, procurement negotiates frequently. However, it must be a component of contract management abilities. After an agreement is hammered out, shifts, tweaks, and adjustments will be required once the actions begin. Simply put, you cannot consider every possible permutation, option, or possibility until the ‘rubber meets the road.’ As such, the role requires negotiation with both internal and external parties to effect reasonable changes or to devise alternatives. Negotiation, of course, is inextricably linked to risk management and collaboration.
- Attention to details
There is no avoiding it. A CM must be vigilant for and adept at minor details, such as missing punctuation at the end of a sentence or omitting a word. Additionally, imprecise or inarticulate phrasing can completely alter the meaning of a clause or critical condition.
Among contract management skills, attention to detail and thoroughness may be the most critical for a CM. Despite its critical nature, it is unclear whether any training exists to assist in this area. As a result, you cannot afford to let contract issues fall through the cracks. The best course of action is to practice, understand the critical nature of this role, and remain vigilant.
How to Become a Contract Manager
- Earn a Bachelor’s Degree
NCMA requires candidates to hold a bachelor’s degree to be certified. Although there is no single degree field dedicated to contract management professionals, a degree in business or contract management may be the best option for aspiring contract managers to prepare them for the tasks and responsibilities associated with the career.
Bachelor’s degree programs in business or contract management typically include courses in project management, contract law, contract administration, business communication, and negotiation, in addition to general business, social sciences, computer science, English, and mathematics.
- Accumulate Experience
Individuals who graduate from an accredited bachelor’s degree program can obtain entry-level positions in contract administration or related fields of business to gain the experience necessary to advance into contracts management positions. Entry-level contract management positions typically require a bachelor’s degree and two to five years of experience, according to the NCMA.
Contract management entry-level positions include reviewing solicitations for contracts, drafting and negotiating simple contracts, preparing and organizing documentation, and assisting mid-level to management-level contract professionals.
- Select an Accreditation
The NCMA offers several contract management certifications, including the Certified Commercial Contracts Manager (CCCM), which is available to commercial contract professionals, and the Certified Federal Contracts Manager (CFCM), which is available to professionals who work with federal contracts. The Certified Professional Contracts Manager (CPCM) certification is available to advanced contract professionals who have mastered all of the Contract Management Body of Knowledge’s (CMBOK) competencies. There are additional certification options, including the Industry Certification in Contract Management-Defense (ICCM-D) credential, which is comparable to the certifications used by the Department of Defense and the federal government.
- Submit an Application to Take the Test
On the NCMA website, you can apply for the certification exam. Applicants must complete the application forms and submit official transcripts from their colleges. Each certification requires prior work experience in addition to a degree. Candidates for the CCCM and CFCM certifications must have one year of experience, while the CPCM certification requires five years of experience. Additionally, applicants must have completed CPE hours before applying. Candidates for the CCCM and CFCM certifications must complete 80 hours of continuing education. Candidates for the CPCM certification must complete 120 hours of continuing education.
- Study for and Take the Test
To assist candidates in preparing for the test, NCMA offers an online preparatory course, a study group guide, and practice exams. After reviewing and approving the application, the NCMA will send the candidate an email with instructions on how to register for the exam. The CCCM and CFCM exams each contain 150 questions, while the CPCM exam contains 180. The test is given at Kryterion Learning Centers and local chapters of the NCMA. Results are immediately available following the conclusion of the test. Candidates are awarded certification upon passing the examination. Maintain your certification by renewing it. To keep your NCMA certification current, you must pay the renewal fee, adhere to the NCMA’s code of ethics, and complete a minimum of 60 hours of continuing education every five years.
Where to Work as a Contract Manager
Contract managers work in a variety of fields and industries, including construction, manufacturing, and insurance companies.
Contract Manager Salary Scale
In the United States, the national average salary for a Contract Manager is $100,900 per year.