How can you communicate contract changes effectively?

Something helpful to remember is don't assume that by identifying the change, it ends there or is isolated. Really assess the ramifications and if it will require changes in other areas, affect other costs, etc. Sometimes it is a domino effect.

Changes are inevitable and can encountered during any or all the stages of project cycle. Change can arise due to Employer, Contractor, Stakeholder, External factors, Internal factors, scenarios which are beyond control of any parties involved in the project. The best and effective way is to identify, Notify and Accept the changes. The second step is to evaluate the responsibility, reason for the change and the quantification of the change with proper demonstration and contemporaneous record available in hand at that moment. Last but not least is the approval/rejection of the changes with proper substantiation.

Totally agree. The way to manage such changes without surprises is to have effective "Supplier Relationship Management" program too where you can keep informing the suppliers and vice versa on changes that may come up and how they need to be handles and what alignment is needed on contract side. This saves a lot of admin time for legal, procurement and supplier.

Contract management is more about relationship management than anything else. Amendments arising from the client and which in many cases are not as hard to hard to handle and transparently discussed with the provider. The trouble comes when a change is proposed by the provider in an environment of mistrust and suspicion by the internal client. A good contract management therefore requires regular review meetings between parties and channels of communication including escalation to the seniors, with this, justification and seeking relevant approvals becomes easy and transparent hence ease in communication.

When it comes to communicating contract changes effectively, there are several key strategies that I've found to be highly beneficial in my experience. Importantly understand the culture and identify the 5 WHYs and their solutions. Emphasizing on these critical communication controls is very essential in any communication of change. Change the style of leadership if it's a challenge. Emphasize on change of mindset and behavior. Importantly have time for everyone as and when they need you. My insights: clear language, timely notifications, diverse communication channels, benefits emphasis, and point of contact.

When it comes to presenting the Change to the decision makers (i.e., Executive Committee or Board) be sure of the following: - Know the type of executives and what they are interested in. - You made an extensive study with all teams and relevant stakeholders. - Present the implications of this change (cost, schedule, quality…etc.). - Present your recommended course of action and alternative options. Each with its advantages and disadvantages. - Be precise, concise and manage the level of details to be discussed at an executive level. I would also like to add that we need to be prepared when no decision is made, or it is pushed back indefinitely. This in my opinion could be the worst-case scenario.

Agree that communication and recording are vital along with impact on deliverables assessment. When a change occurs the project needs a wholistic review to enable the project manager to identify any knock on affect to the overall scheme.

Putting it in a simplistic form, adopt a simple but effective change management system and continually assess the effects of the change(s).

Communicating changes should immediately be done to avoid any negative impact. written communication is to be preferred, if there is any changes in contract there should be corrigendum issued, if there is any addition in the information, addendum is to be issued and circulated to all the stakeholders. acknowledgments to be taken and confirmed that information is well received

It needs thorough background understanding of existing terms and conditions of the contract to evaluate the need and impact of change. Once listed all the steps involved in proposed change, it comes the time to study affected entities and their views for acceptance and adoption of change.

Change Management has to be agreed only if there is no impact on the schedule of the project . Changes has to be identified as minor and major and impact of the changes in Design , Procurement and testing and commissioning and if there is any equipment changes.

Once a change is confirmed, it is time to notify all stakeholder who are going to get affected and benefited by implemented change. Communicating just the implemented change is not enough. It shall be supported by numerical presentation of short term and long terms advantages to the stakeholders.

The tone of the notification whether the change is a matter of right or otherwise, should always be respectful. The explanation should be direct, clear, complete and reasonable.

Obviously communication is Key. As soon as a change is required then all stakeholders should be contacted. Don't assume that it wont effect another stakeholders let them confirm to you that it won't effect them. In this way you can evaluate the best option for all parties. Once a solution is proposed communicate to all stakeholders again for their input

Time may be of essense here. There may be defined timelines in the contract for notifying the change and its impact. Any delay in notifying the change may have impact on the rights of affected party to claim for such a change.

Stakeholders need to be notified of any change regardless of its impact, in as much as the initial scope is no longer the same.

Early warning is essential as it provides affected stakeholders the opportunity to mitigate or avoid any adverse impacts associated with the changing circumstances. In some cases contracts impose a positive obligation upon one party (suffering the loss) to provide an early warning as soon as it becomes aware of an event which may cause a delay or increased costs to the contract. These contracts typically goes on to state that failure to provide an early warning will cause the extent of compensation awarded to be limited to the compensation that would have been awarded had the early warning been provided timeously.

Clear delegation of "actual" authority is important! Some stakeholders can decide what makes complete sense for the benefit of all affected parties, those parties can send through documentation of the changes and benefits to all parties--but if the real benefits and obligations of the new change order are not formalized per change order process and communicated formally to all parties, good work MAY be squandered worthless. Administration of acceptable compensable milestones can't be documented. Project scope and direction will deviate from written expectations and dis-trust will likely ensue. AP and project management will be trying to catch up to important field changes and the contractor will be pressing for rightful payment. Common.

Good steps have been mentioned so far. An all time winner anytime any day however is to call an all Partie's meeting. In this meeting, you do not just pass the information, you also elicit immediate feedback from all concerned and interested parties. Builds shared vision and common understanding of the issues involved.

Always over communicate rather than under when it comes to changes. Have a central platform to communicate from so everyone has a chance to see it. Make sure you have ALL stakeholders identified. Excluding a stakeholder because they are not in your realm, or didn't at first seem relevant, can cause further changes or issues later on. We don't know what we don't know. Make sure, by surveying MANY teams, that you have ALL stakeholders and each is notified.

The one thing that helps negotiation of terms, especially when the current contract is still in effect and far from expiration, is to have frequent reviews and evaluations of the specific clause i.e. weekly/monthly. This cadence allows for emotions to be left out of the negotiation, as all parties get to present and communicate the impact of the change /new clause on their respective organizations and what is fair. Aiming for win-win here helps tremendously to contracts department to document the new clause clearly for the next contract and possibly other contracts in similar space.

It is a tendency of the parties to defer decision making on contract changes till the end of the project. This shall be prevented by having regular follow-up and meeting between the parties to conclude the effects of the same on the contract. Necessary amendments to the contract shall be effected with mutual discussion at the earliest.

Scope Creep and "Work Found" or "Discovery Work" are normal features of any major Turnaround or Project. Scope change management approval process entails Internal and External processes. Internal process should ensure appropriate value engineering, alternate plans, contingency plans and appropriate approval process with respect to Cost, Schedule, EHSS and Reliability. External process depends on the type of Procurement strategy utilized. LSTK contract with pre-decided Time Unit Rates for Manpower and Resources always ensures to have accurate estimation for any job and approval for the same without resulting in commercial disputes. Long drawn out negotiations during crucnh time of critical path execution will have severe business impact.

During the negotiation process, find common ground and explore creative solutions to address concerns: instead of adopting a rigid position, adopt a problem-solving mindset. Look for alternatives and propose creative solutions that take into account the interests of both parties. By thinking outside the box you can identify new strategies that reduce potential risks and maximize the overall value of the change to the satisfaction of all stakeholders.

Negotiation is a “discussion aimed at reaching an agreement”. Everyone should enter the discussion outcomes driven, willing to compromise and innovate within reason to reach shared goals. Contract and Vendor management often intersect and in this context you want to have flexible negotiations that lead to healthy and trusting ongoing relationships.

Change in any organization is such an import tool. The growing factor in change can be implemented through the technology tools. Methods of change, where it is in the operation till the end result of Evalution revert to change. The constant search and research in your product are fundamental important to add value in change.

The terms should be negotiated and flexible for all the parties, sometimes too much rigidity by either party fails the contract.

Integrative negotiations is essential, all the concession trades tendered and risks mutually discussed, agreed, and documented. Be careful not to exceed your actual delegation of authority, some "apparent authority" stakeholders may not have the authority to concede certain elements, then later on higher authority gets involved and changes weren't "actually" authorized. The mutually beneficial focus is work performance, not diverting resources to legal discussions and suspending the schedule until we restructure the documented agreement. Win / win is always the target, but make sure the "actual authority" players are at the table, in agreement, with the rest of the work TEAM.

Negotiate the Terms Once stakeholders are informed, open a channel for negotiation. Establish a platform where concerns can be addressed, questions answered, and alternative solutions explored. Successful negotiation requires flexibility and a collaborative approach. Be willing to adjust terms to accommodate the needs and expectations of all parties involved.

Document, document, document. Keep thorough records of all exchanges even as they evolve from the beginning to the final agreement. You'll want records of how the final agreement was reached to help identify the intent of the parties if something were to go wrong. It is also a good practice to get into on any action because recalling off the top of your head is not a legal document. If meetings are held it's generally best practice to have a scribe, if on Teams you can use transcription tools and save them to record.

Check your retention policy and save relevant emails, documents, make note of phone calls, etc. Memory isn't an official record.

I find that the fourth step in change management involves meticulous documentation of the change request. It's imperative to emphasize that the chosen template should also adhere to relevant industry standards and best practices to maintain consistency and legal compliance. Furthermore, it’s essential to provide clarity on what should be included under each relevant detail, i.e., the scope, estimated cost, etc. This level of detail ensures that everyone involved fully understands the implications of the change. Moreover, defining the roles, responsibilities, and obligations of each party regarding the change is also paramount. This helps prevent misunderstandings and disputes down the road, contributing to smoother project execution.

Once the agreement has been finalized, its impact(s) on other aspects of the project should be intimated to concerned stakeholders with actions to be taken by other groups should be clearly articulated. Put another way, a well documented action plan should be made available to the concerned groups. The change should be assessed through the risk assessment route also to see if and what risk management plans needs to be implemented, and if they have been suitably costed. It is the Project Manager's responsibility to make sure that this action is also completed along with documenting the contact change.

One thing that I have always implemented in the Contract Change Management is to provide visibility of the final signed copy of the change order to the other party. Either by sending the fully signed Change Order to the client via email or archive it in a common SharePoint or CLM. Also, one can share the confirmed version of the contract so that all the parties now know the newly agreed terms being incorporated in the contract and are aligned towards the contract performance.

A major part of a Contract Manager’s role is documenting. If changes are not documented accurately you leave yourself vulnerable to challenge and missing obligations. When documenting change this should always be done on your most current templates and processes. Where the company has digitised the contracting process it is important to ensure the technology is embraced along with the automated controls within there to create compliant documents agreements. There can be faster ways to get the change made, but the compliant approach is always the way to go.

Everything should be documented, as the Contract Agreement is the only language for all the parties to be followed! If something is missing, its never late to include that as well!

Documentation of the last revised agreement is essential. Acknowledgement by the affected parties can be even more important. "Read, acknowledged, agreed" is standard operating procedure for disciplied high performance teams. Try to get the changes sent out to the affected parties, with a request for "REPLY" for "Read, acknowledged, agreed". Many times the response was that a key stakeholder was too busy to see the change and didn't know. Scheduled progress can actually be consciously slowed down until the documented changes are recognized: these become sunk, unrecoverable costs that add up at contract completion and we wonder why we didn't make more (some) profit at the end of the contract.

Document the Agreement Upon reaching a consensus, document the agreement meticulously. This documentation should include the revised terms, conditions, timelines, and responsibilities. Having a detailed record is crucial for preventing misunderstandings and disputes in the future. It serves as a point of reference for all parties involved.

Furthermore, it's essential to thoroughly grasp the content of the Agreement that these modifications will apply to. Inquire about any prior amendments made to the document and assess how the proposed changes might impact any associated Annexes, Schedules, or Order forms, if applicable. Additionally, ensure that these changes do not disrupt the Data Protection (DP) schedule. This meticulous approach to contract management helps maintain clarity and consistency throughout the process.

The Implementing parties should be clear of their role and responsibilities, none should shift their responsibilities on eachother! Often the lack of commitment to the responsibilities leads to the failure.

If you find that the documented change adversely affects the “other elements or clauses” of the contract then it is probably an indication that the agreement, as concluded, is defective and requires amendments or supplication. Revert back to step number 4 to ensure that the agreement adequately addresses all relevant contractual matters. The agreement should be concise, unambiguous and enable effective implementation.

The implementation of change in the contract is one important action. However, the Project Manager or his deputy needs to ensure that actions that were articulated in the action plan alluded to under 'document the agreement' are being implemented in a timely manner and the risks if any are being properly managed.

The technical implementation of change is not always done by a defined contract manager. Often this will pass over to an operational role which should be identified in the contract RACI. The important piece here is for the contract manager to ensure that the person(s) implementing the change are clear on the change scope, impacts and timescales. They should then check into at the agreed schedule to ensure any new obligations are being met

Implement the Change Efficient implementation is key to the success of contract changes. Clearly communicate the steps involved in executing the change and provide any necessary resources, training, or support. The timely and transparent implementation helps maintain the trust of stakeholders, reducing resistance to change

When it comes to managing changes in contracts, the step involves completing an issue log or contract changes tracker, as per your company's established procedure for monitoring alterations to Schedules, GT&Cs, Trial terms, or the Framework Agreement. Following this, engage in a discussion, either through a call or email, with the product owner/manager or the relevant business representative to gain the understanding of the reasons behind the requested changes.Furthermore, it's essential to thoroughly grasp the content of the Agreement that these modifications will apply to.

I find it interesting this is the sixth step. The outcome(s) of the contract are the key to why it was commissioned. The change should be driven by the need to vary the output / activity to meet the outcome.

Always evaluate what you could do better, as soon as possible. There is no better a time to improve and make a change as now. Continuous improvement.

Lessons learned and feedback is quite frequently forgotten and left behind… there is no harm in asking your team at end of a meeting / milestone ‘how did it go, and what we should be doing better next time’ ? It can instigate a healthy discussion and motivate people to participate in quality improvement. It can be informal.

Document the whole change process as knowledge management. Sometimes, the actual result will differ from planned. And it is important that any proposed subsequent changes will be able to correct and improve on it. However, do not frame it as a mistake-finding exercise.

Effective communication of contract changes is paramount to ensure that all parties involved fully grasp and concur with the proposed modifications. It's about ensuring that both sides are aligned in their understanding and that the process of implementing these changes unfolds seamlessly and in compliance with the law. Clear and transparent communication plays a pivotal role in averting misunderstandings and fostering collaborative cooperation among the parties concerned

It's one of the most important topics, especially in construction projects; however, in the fast-paced projects, you have to find hybrid and fast processes to follow. Normal change management techniques will always delay the project.

It is important that the event of change affecting time, cost or performance guarantees under the contract shall be communicated to the other contracting party at the earliest. While the full impact of the change cannot be estimated upfront, the notice shall be given informing the effects of the change shall be intimated separately. Having standard template for notifying the change request and capturing the effects of the change request on performance of the Contract will help a great deal in this.

In my opinion there should be core principles of changes so we should rectify and implement. Moreover, the core reason of change must be recognized by the parties involved and if the changes are not distributed effectively the cash flow than immediately implement or must be addressed by parties if effecting the projects bugged.

Leveraging an online management tool like SAP or ERP is pivotal in my contract management approach. These platforms enable meticulous tracking and streamlined communication of contract changes. I advocate for sending concise email updates to stakeholders for transparency. Some changes warrant stakeholder approvals, while others are purely informational. The key is to distinguish which alterations require immediate attention and consent, ensuring that all parties remain informed and engaged throughout the process. All information stays in the cloud for 100% transparency!

It should be made sure by the project leader that contract changes are understood in the overall context of the project. Often the issues are viewed and handled in with a tunnel vision. Understanding the changes in the big picture helps in avoiding surprises down the road.

Lessons learnt. Why was the change required? What would you do differently next time at project initiation stage to avoid this?

One thing I found helpful was the section on Identify the change Communicating contract changes by identifying the nature, scope, and impact of the change as well as its impact on the existing contract terms and conditions and how the change affects the deliverables, timelines, costs, and risks of the project.

Just a few notes on change management: there will be always different objectives and pulling factors. Who will benefit from a change and who will suffer a detriment? What risks that change creates and how it can be managed, mitigated or transferred?

Sabe-se que os fatores ambientais ao logo do projeto são dinâmicos, em especial para aqueles de longo prazo. Nesta condição, acredito que, além da necessidade de trazer flexibilidade e adaptabilidade para dentro do contrato, devemos identificar e monitorar as expectativas, tratando a mudança como um processo de adaptação, que nos levará com mais assertividade ao sucesso do projeto. Para isso, a colaboração entre o cliente-fornecedor e demais partes interessadas é essencial. Para ser bem sucedido e saber o grau ideal de flexibilidade, devemos entender o contexto do projeto, a abordagem que está sendo considerada, avaliar os impactos da mudança e logo implementá-la, visando os objetivos e benefícios estabelecidos.