Contract Management System •Planning or Enhancing your CMS

•Due Diligence of Part(ies), Produce and or Service

•Material contract terms required by Company and or regulators

•Negotiation & Finalization of Contracts

Step 1Documentati

on and Reporting

•Monitoring of Part(ies), performance of product or service, and compliance with contractual terms

• Identification of Roles & Responsibilities•Termination, Modification & Addendums, or Extension of Contract

Step 2Oversight & Accountabilit

y

•Periodic review and audit• Identification of issues, losses and risks• Incorporation of documented issues & recommendations back into workflow (Step 1 & 2)

Step 3Independent

Review

Documentation and Reporting Oversight and AccountabilityIndependent Review

PLANNING – how does your Company plan to manage the contract process – what contracts will be included, how will you allocate resources, what levels of security will be required, what oversight will be required, what tiers of vendors will there be, what internal groups will be involved in the process (IT, Legal, Business Unit) and how, what regulations affect your industry, the contractual services or products?DUE DILIGENCE – how does your

Company review potential third parties to contracts to ensure they (or their service or product) have the requisite experience, skills, controls, economic strength to perform?

CONTRACT NEGOTIATION – how does your Company allocate responsibility and oversight for negotiating the terms of a contract including enforceability, cost/pricing, liability, dispute resolution?

ONGOING MONITORING - how does your Company monitor the performance of the contract – including your company’s and the other party’s compliance with the terms - identifying and addressing non-compliance?

TERMINATION – does your Company have a plan for migration of data or transfer of services to another party if the contract is breached or the vendor fails to meet their performance standards?

OVERSIGHT AND ACCOUNTABILITY – does your Company have clearly defined roles and responsibilities for monitoring the contract and the parties’ performance – is it the business unit’s responsibility, the legal department’s or another administrative group? Is it an automated process or system? Is it auditable?

INDEPENDENT REVIEW – is there an independent group that conducts periodic reviews of the contract management process to assess whether the process aligns with your Company’s strategic goals? Whether the process effectively manages risk and resources allocated and budgeted to it? Whether the “lessons learned” are being incorporated back into the due diligence, negotiation process, or monitoring process?

As a Certified Risk and Compliance Management Professional and former in-house counsel for over 10 years representing private and publicly traded financial institutions as well as litigator for the largest publicly held P&C insurer in America, I consult with US and EU companies to develop, review and enhance their CONTRACT MANAGEMENT PROCESS. Elizabeth Baker, JD, CRCMP

BLUEPRINT FOR EFFECTIVE CONTRACT MANAGEMENT SYSTEM