Many people have never heard of contract manager jobs and wonder why contract management is so essential to commerce. Contracts are legally binding instruments that control the delivery of goods and services to businesses. Without contracts, businesses would not receive supplies on time or complete projects by the final deadline. Furthermore, businesses would easily overstep their budgets and fall into debt.
Contract management can be conceived as writing down goals and determining the strategies to reach those goals. For instance, when preparing a contract with vendors, a contract manager meets with a vendor representative and discusses the goals of their business relationship. The contract manager’s business wants prompt delivery of supplies while the vendor wants regular payment for those deliveries. The contract manager subsequently drafts a contract that addresses both of those objectives, spelling out a schedule for both delivery and payment.
After drafting any contract, it is essential that the contract manager place it in an easily accessible location. The time may arise when a breach of contract is in question, and business managers will need to reexamine the relevant contract to confirm the breach. The inability to locate a contract may result in the business paying large amounts of money to a prosecuting party, even if the party has legally breached the contract.
Contracts are also imperative during acquisitions procedures, when a business merges with or purchases another business. Since businesses are expanding on a global level, there is great demand for contract managers who specialize in acquisitions. Acquisitions procedures demand expert-level contract management because one party may try to back out of some part of the agreement. There is especially high risk for this during acquisitions because these lengthy contracts are prone to loopholes. Therefore, only a seasoned contract manager is usually capable of making these contracts airtight against breaches.
In order to avoid future disputes over contracts, good contract managers take the time to negotiate with other parties. The contract manager and a vendor representative, to return to the previous example, may spar over pricing issues, shipping schedules, deliverables, and billing procedures. Therefore, contract managers use clear communications skills to ensure the other party’s full comprehension of the contract’s terms and conditions. It often takes several sessions of discussing the contract until the other party reaches this understanding. Yet, carving out this much time raises the chances that the contract will deliver its provisions.
All contract-management students undertaking a contract-management degree learn the Uniform Contract Code. This code is part of a set of acts that make uniform the sales laws of each state in the U.S. Contract managers have to pay special attention to the section of this code governing the procurement of goods. The procurement of goods takes place when businesses purchase goods or services. Goods may include supplies while services include human personnel, such as contract workers.
Contract-management students also learn about government contract laws and regulations. Their courses include the study of government contracts, labor contracts, and consulting contracts. A government contract refers to contracting with government agencies or programs to provide goods or services. For example, an automobile manufacturing company may contract with the U.S. Army to sell them trucks. Though the company provides the same commercial service, the contract manager drafts a different contract when working with government agencies. Government contract negotiation is a challenging process because it demands more attention to intricate government regulations. The government-contracting business is also required to adhere to a drug-free environment, affirmative action laws, and minimum wages.
Contract-management students who study labor contracts learn how to negotiate contracts with labor unions. During these negotiations, they settle wages, medical benefits, and insurance programs. They additionally know how to interpret the specialized employee language contained in these contracts, which differ from other types of contracts. Moreover, they liaise between unions and upper managers and are responsible for settling labor strikes.
Consulting contracts are growing increasingly common with the advent of consulting firms. Many companies now prefer to hire consulting contractors in lieu of full-time employees because it is less costly for them. Like all contracts, consulting contracts contain terms and conditions relating to the form and time period of services. Many consulting contracts require the consultant to give seminars or personally train management staff. Furthermore, these contracts often require the consultant to review company operations and give suggestions on their improvement.
Since contract-management jobs focus so much on risk management, it is only fitting that contract-management students learn accounting for their degree. They specifically learn cost and price analysis, which calculate the prices and costs specified in contracts. Cost and price analysis situations occur when a company bids to procure goods or services. For example, an architecture firm receives bids from construction contractors to work on a building project. The firm’s contract manager first compares the lump-sum bids of these contractors, which is called price analysis. Cost analysis takes place when the contract manager looks at each cost element of the total bid-on price, such as labor costs and supply costs. Cost and price analysis help contract managers decide which contractor is best for their business.
Contract manager salaries are extremely competitive. On average, contract managers earn about $57,000 at entry level jobs and $82,000 after at least five years. While there are many entry- to mid-level job opportunities in contract management, it is difficult to advance to senior-level jobs in contract management due to keen competition.
