Contract management is identified as a profession by the U.S. Department of Labor because it consists of at least the five distinct characters of an occupation. These characteristics include the National Contract Management Association (NCMA) professional organization, a code of ethics, as well as a body of knowledge, publication, and research arm that undergo continuous updates. The purpose of this paper is to highlight the importance of contract management and discuss contract management ethics. This research will also define, explain, and defend technical skill, one of the three competencies of contract managers. All things considered, technical skill core competency plays a critical role in contract management by helping professionals in the occupation to prepare bids and proposals, and also analyze procurement requirements, among other aspects of a contract.
Importance of Contract Management
To understand the importance of contract management, it is crucial to have an insight into the role of those in the profession. Their work is to manage contracts, deadlines, terms and conditions, and deliverables while still maintaining customer satisfaction (National Contract Management Association, 2013). In today's increasingly competitive corporate environment, contract managers play a crucial role in the procurement or contract management environment. If contract management is not executed properly, it can result in significant losses ("Skills of an Effective Contract Manager", 2020). The significance of contract managers is reflected in the profession’s mission. One of its goals is to ensure proper communication between buyers and sellers as well as the satisfaction of the client’s wants. The harmony between the two is beneficial for all stakeholders in any given transaction. Contract management also ensures that rules and regulations are always met by individuals or organizations in a contract. This minimizes the risks associated with bad and void contracts (National Contract Management Association, 2013). Contract management also advances and protects the interests of the stakeholders.
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In this respect, Contract Managers are required to have advanced expertise in three main areas; technical, conceptual, and human relations (Sunindijo & Zou, 2011). The former is demonstrated by completing the tasks in a technically-competent manner, while the latter relates to the management of people. Conceptual skills relate to how the contract manager(s) sees the contract's organization in terms of its goals. This paper will explore one of these core competencies, namely, technical competence.
Contract Management Ethics
A code of ethics can be defined as a set of guiding principles containing values and proposed approaches of a profession that aim to promote honesty in the occupation. The contract management profession consists of a code of ethics that all members must follow. As in many other professions, a clearly stated code of ethics sets an ethical standard, lays rules, and also acts as a warning towards misconduct. The code of ethics sets a professional culture that promotes trust, integrity, moral behavior, and excellence in contract management. Proper implementation of the code of ethics positively impacts businesses because of increased loyalty and trust among associates, organizations, and clients. All members of the NCMA receive a letter containing the NCMA Code of Ethics upon recruitment (National Contract Management Association, 2021).
The first of the codes is members’ expectation to serve in the profession to their best ability. All members must strive and demonstrate diligence in all their endeavors in their occupations as contract managers. The members' activities should also promote trust, confidence, integrity, and credit to the occupation. Another guiding principle is that financial or personal interests should not interfere or cause conflict with the proper conduction of professional transactions. Professionals in the field are also expected to comply with all the rules and regulations that govern the contract management procedures (National Contract Management Association, 2021). Contract managers are also expected to use formal and informal means of education to advance their knowledge and skills in their work; in addition to this, they are also expected to openly share their knowledge with their colleagues to advance the profession. The last guiding principle in the NCMA Code of Ethics is the acknowledgment that unintentionally influencing others to breach the guidelines is considered as a violation of the code (National Contract Management Association, 2013).
Core Competencies: Technical Skills
One of the core competencies that contract managers ought to have is technical skills. According to Nasir et al. (2011), technical competencies are defined as skills that require a combination of specific knowledge and skills of the work done using the body to achieve the target. In other words, technical skills are the expertise that makes one accomplish a task in a technically-competent manner and monitor it independently and critically. Technical skills are usually tangible, specific, and usually teachable; they can be attained in both formal (academic channels) and non-formal ways (progressive tutorial, electronic, and practical). This means that contract managers can learn these skills and apply them in their work environment. A Contract Manager should have an appropriate mix of technical and non-technical skills. The appropriate mix of skills depends on a wide range of factors. Some of these factors include the nature and complexity of the contract, the levels of risks involved in the contract, and the operating environment (Contract management Practice, 2018). According to the “Contract management Practice” (2018), the typical technical knowledge and experience that a Contract Manager should have include "procurement, project management, legal knowledge, financial management, analytics and reporting, and administrative, record-keeping" (6). Thus, contract managers should have all these skills. They should also have additional skills depending on the type of contract or the complexity of the contract.
Technical skills are demonstrated by competently performing the tasks required. Contract Managers often prepare bids and proposals and analyze procurement requirements, among other aspects of a contract. Thus, a technically competent Contract Manager tends to have a thorough knowledge and understanding of the nature, complexity, and aspects of the contract. This includes the technical specifications of the contract, the terms of reference, the conditions of the contract, and remedies, among many other aspects. A Contract Manager should also know how to read the bill of quantities (BOQs) in conjunction with the technical specifications, and the drawings. Other technical skills required by contract managers are managerial, leadership, marketing, financial analysis, accounting, economics, and IT expertise. By acquiring these skills, a contract manager will become very competitive in the market. In this way, a contract manager would be able to contribute significantly to his or her organization's success and goals.
Management Skills
The technical skill of management is critical for contract professionals; this is because aspects of the skill are used in achieving the goals of the organization. The four key aspects of management are planning, organizing, directing, and controlling (National Contract Management Association, 2013). Planning involves preparing a company for the far and near-future activities as well as devising strategies to cope with unpredictability in the industry. Contract managers should also have organizing skills where they appropriately allocate company resources to meet specific goals. Professionals are expected to have the technical skill of allocating specific duties to particular departments. Leadership and directing are other crucial technical skills required by contract managers. Having the skill to appropriately implement working leadership skills is one of the most challenging jobs for all contract managers. The final function under the management skill is controlling, monitoring, and evaluating tasks undertaken by the organization. According to the National Contract Management Association (2013), additional management skills such as communication and time management skills add to the competence of contract managers.
Leadership Skills
Leaders are expected to inspire employees and have them follow the leader’s vision. Good leadership also promotes employee motivation which promotes productivity. Therefore, contract managers are expected to have good leadership skills to motivate their subordinates to be willing to do whatever is needed to achieve the organization’s goals. Contract managers should also have well-developed visions with clearly communicated pathways of materializing the visions; such leadership skills inspire team members to improve their performance. Having a clear vision for the future is crucial for contract managers; this is because excellent leaders are able to look into the company’s future and make clear goals that will be beneficial to the business. Visionary leaders are able to make appropriate decisions that make impressive profits and ensure the adaptability of the business in changing environments. To achieve this, different contract managers utilize various leadership styles depending on what project they are working with and what people are on their teams.
According to Nasir et al. (2012), a good leader helps his/her followers achieve their goals; leaders often take pride in the accomplishments of those they interact with along the way. To achieve this, it is vital to gain trust through ethical actions, inspire greatness, and fulfill all the leadership duties as expected. Those in power should identify their strengths to discover useful talents within those strengths and also point out the significance of the talents. Identifying challenges and misconceptions of existing strengths in a leader may help them guide their followers in a better way. Some of the traits of a leader are decisiveness, integrity, creativity, responsible, visionary, innovative, influential, and good communicator, Effective leadership is the power behind a diligent contract manager.
Marketing Skills
Timely advertising and relevant information concerning industry trends are required if a company is to develop successful marketing strategies. Marketing skills vary depending on the consumers’ traits and the number and nature of products or services being offered by a company. The main importance of contract managers having advanced marketing techniques is to retain and expand the market share (National Contract Management Association, 2013). One of the primary marketing skills is identifying potential clients in the industry; once this is achieved, contract managers tailor their activities to match the needs and interests of the target market. Tailoring the organization’s activities include setting appropriate prices, using appealing distribution channels, as well as utilizing the most impactful marketing avenues. Market segmentation is another marketing technique that contract managers should have; this is the dividing of target markets into geographical or demographic groups. A summary of the marketing skills shows that contract managers should be able to identify, target, segment markets, and also advertise and distribute products and services to consumers.
Financial Analysis Skills
One of the functions of a contract manager is to receive contract awards (Sunindijo & Zou, 2011). To achieve this, the professionals must have a basic understanding of financial analysis which helps determine whether a company is stable enough and has enough to pursue particular contracts. Financial statements are used to analyze an organization’s financial position, earnings, and spending. The first of the financial statements is the balance sheet; it shows the total assets, liabilities, and the owners’ equity in the business. The income statement shows the total money coming in and going out of a business over a given period while the cash flow statement shows how an organization exchanges money with the world (National Contract Management Association, 2013). In addition to having financial analysis skills, contract managers should have other expertise such as cost control techniques and identifying opportunities for mergers, acquisitions as well as other useful finance techniques.
Economics Skills
Economics involves techniques that seek to properly utilize the scarce resources of a company. These limited resources may range from raw materials or capital and human labor. This means that contract managers have to know what needs to be produced and in what quantity. Economics requires basic knowledge and technique concerning the supply and demand trends of the industry. Demand describes buyers’ behavior in a particular market while supply describes the sellers’ behavior. Contract marketers should have a technical understanding of the four laws of supply and demand (National Contract Management Association, 2013). The complex relationship among supply, demand, and price should help contract managers chose the most appropriate price for their products and also predict the prices of products from competitors as well as prices for procured items. Technical expertise on supply and demand also helps professionals in the contract field to understand the different types of markets; these are perfect competition, monopoly, oligopoly, and monopsony (National Contract Management Association, 2013). Understanding such knowledge helps contract managers to spot lucrative opportunities in the market place arising from the complex dynamics.
Information and Technology (IT) Skills
IT skills are necessary especially with the ongoing digital revolution that allows digital record keeping, social media, video conferences, e-learning, artificial intelligence (AI), among many others. In the contract management profession, record keeping, collection, and retrieving as well as communications, are crucial. The use of emerging innovations is needed to ensure that companies remain competitive with their colleagues. According to the National Contract Management Association (2013, p. 129), “Many organizations utilize technology to manage suppliers, procure items, and communicate.” Numerous business transactions also rely on the internet because of their advantages such as low cost and short transaction time.
Conclusion
All things considered, technical skill core competency plays a critical role in contract management by helping professionals in the occupation to prepare bids and proposals and analyze procurement requirements, among other aspects of a contract. Ethics, coupled with the core competencies of contract management, are crucial for organizational success. Some of the technical core competencies discussed include management, leadership, marketing, financial analysis, economics, and information and technology skills .
References
Contract management Practice . World Bank. (2018). http://pubdocs.worldbank.org/en/277011537214902995/CONTRACT-MANAGEMENT-GUIDANCE-September-19-2018-Final.pdf
Nasir et al. (2011). Technical Skills and Non-Technical Skills: Predefinition Concept. https://www.researchgate.net/publication/259782791_Technical_skills_and_non-technical_skills_predefinition_concept
National Contract Management Association. (2013). Contract Management Body of Knowledge (CMBOK) (4th Ed.).
National Contract Management Association. (2021). Code of Ethics . NCMA. https://www.ncmahq.org/about/leadership/code-of-ethics
Skills of an Effective Contract Manager . Villanovau. (2021). https://www.villanovau.com/resources/contract-management/skills-of-an-effective-contract-manager/
Sunindijo, R., & Zou, P. (2011). CHPT construct: essential skills for construction project managers. International Journal of Project Organization and Management , 3 (2), 139. https://doi.org/10.1504/ijpom.2011.039818
