Contract Management & Procurement
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Contract Management and Procurement is a sub domain of the Support domain. The following tasks are within the scope of this sub domain. Contract Management is the Airline’s administration of contracts with its vendors. This comprises the contract creation, negotiation, adherence, and the definition of Service Level Agreements (SLA) and Key Performance Indicators (KPI) for managing the day-to-day performance of the vendor. Furthermore Contract Management includes managing changes that may be required as the relationship changes and problems arise, documentation of changes that may have been agreed and analyzing the benefits that accrue or may be available from the contract. The procurement refers for example to Fuel for aircraft, equipment and required third-party services. Here, procurement guidelines are set, which describe the rules for procurement such as target, statement of validity, fundamentals, and the ethics of procurement including interest, confidentiality, and fairness and competition compliance. Procurement includes supplier management as well. Within the procurement process, sources of supply are investigated, price quotations obtained, negotiations with suppliers on price and delivery performed, contracts prepared (which is part of contract management), documentation, insurance and shipping arranged, installation and commissioning of procured equipment monitored. The ICAO provides in the document “ICAO/TCB PROCUREMENT PROCEDURES AND MECHANISMS” a detailed standard for Contract Management & Procurement of aviation industry: http://www2010.icao.int/APAC/Meetings/2013%20CRVTF1/WP07_ICAO%20AI3%20-%20ICAO_Revised%20TCB%20Procurement%20Procedures%20and%20Mechanisms.pdf Following procurement services (named by ICAO) belong to Contract Management & Procurement: • identification of supply sources on a worldwide basis; • call for tenders • commercial evaluation of tenders • commercial contract negotiations • drafting and award of purchase order/contract documentation • commercial administration of purchase order/contract Including following technical services: • preparation of detailed technical specifications • preparation of technical tender documentation • technical evaluation of tenders • technical contract negotiations • drafting of technical component of purchase order/contract document • review of system design document • site and equipment inspections • acceptance and commissioning activities, etc.