The determinants of procurement contract management on organization performance

Abstract

A contract is a written or oral legally -binding agreement between the parties identified in the agreement to fulfil the terms and conditions outlined in the agreement. Contract management refers to the business processes that manage the creation, implementation, and evaluation of contracts to maximize business performance and minimize risk. Contract management is the process that ensures both parties to a contract fully meet their respective obligations in an efficient and effective way in order to deliver the business and operational objectives required from the contract thus providing value for money. Legally binding contracts determines the stakeholder’s links of a company, pricing structures, job scope, rights and responsibilities, project timelines, guarantees etc. Since agreements are critical, efficient contract management can significantly enhance organizations' efficiency. Likewise, if the company is not well structured, it could expose the enterprise to different operating and economic hazards and influence the end result. Despite the importance of contract management amongst the procurement authorities, most organizations in the world over still face uncountable challenges in realising its importance. The study thus sought to highlight the key determinants of procurement contract management and their effect on organization performance. Specifically the study sought to establish the role of compliance of contract conditions, contract documentation, cost management and contract monitoring on procurement contract management in organization performance. This study adopted descriptive research design. The target population of this study comprised of 25 procurement staff, 25 finance staff and 20 management from the internal and external customers of organization set up