By now we must be familiar with the concepts of management responsibilities. In this article, we will discuss the standards that would be associated in developing a contract between the supplier of product or services (organization) and its client/customers (buyers of the product). The chapter discusses in detail issues of pricing, negotiations, and amendments between organization and customer and also between organization and contractor.
Contract review is an interesting requirement due to its ambiguity in terms of interpretation. Contract review is the process of gathering the stated and unstated needs and expectations of customers and communicating these needs and expectations to all departments within the company. All contract review activities are documented and analyzed for improved.
The objective of this article to make you understand about some aspects like – How to describe contract review as defined in ISO 9000 and QS 9000, defining the procedures of contractual pricing, negotiations and agreement, explaining contractual amendments and discuss the communication process, preparing records of maintenance between customers and suppliers.
Overview of Contract Review as Defined in ISO 9000 and QS9000
The element Contract Review needs careful handling while implementing due to the grey areas of understanding. The contract review plays an important role in defining the relationship between the organization and its clients/customers.
Contract review has some salient features which include:
- Customer specified requirements: These include the requirements which are specified by the customer before or after the delivery of the products.
- Requirements that are not stated by customers, but are necessary for the specified use of the product
- Restrictive and legal requirements related to the product
- Any additional requirements determined by the organization like limitations, warranty, and special requirements
Contract review of an organization includes prior planning that should focus on reviewing the customer requirements before committing to the customer. It needs to check for the following:
- Ability of the organization to meet customer specified requirements
- 100% completion of critical orders prior to acceptance
Other requirements need to be determined by the organization are:
- Organizations have to review the contract, tender to ensure that requirements are defined and documented.
- The Clear idea of terms and conditions by the organization.
- Apart from original order/ contract specification customer may also request additional work to be undertaken by the organization. In this circumstance, the additional work content has to be documented to avoid ambiguity
- The terms and conditions in the contract should address the products and services to be supplied, the volume to be supplied, the prices, the delivery date, maintenance of the supplied product/services and any other special requirements the customer would like to be incorporated in the contract and agreed to by the supplier
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