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How to write a contract

All contracts are different, but take a look at our handy checklist to make sure your contract is a success

How to write a contract

Contracts can range from a single, ad hoc agreements to long term and complex agreements for larger projects. It’s clear that a ‘one size fits all’ approach to contracts will be ineffective, but where do you start? It’s important that whatever form of contract is drawn up that it reflects the size, nature, value, and complexity of the project, but also the relationship required with the potential supplier.

Considerations for your contract

All contracts are different, but there are many important issues that you’ll need to consider when drafting the contract up. The below acts as a checklist when thinking about what to include in your contract.

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4. Decide the type of specification to be used and then prepare draft:

In large, complex contracts the document could include the following:

Introduction
Scope of the requirement
Background to the requirement
Detailed description of the functional requirements, classified as essential, optional, and desirable
Description of the performance requirements including input and output details
Timescale/timetable
Performance measurement requirements, for example volume, accuracy, availability, including damages and incentives/ service credit details
Other requirements, for example security, access, standards, training, personnel, disaster recovery, data archiving, data protection
Constraints, for example, time, interface with other parties, IT issues.
Contract management requirements, for example management information, project management and risk management methodology, and processes
Contractual requirements, for example terms and conditions, roles and responsibilities of personnel, opportunities for submitting alternative proposals
Procurement procedures including timetable, evaluation and acceptance criteria and process, contact information, format, and content of responses.
Appendices providing background data, statistics, organisational information

What does a successful procurement contract look like?

As discussed, contracts vary depending on the type and scope of the project. A successful contract should:

Set out the requirement fully, clearly, and logically, leaving no unanswered questions
Focus on the outputs and how they are to be met
Contain sufficient information for potential suppliers to submit credible and realistic offers
Ensure that all information needed for effective evaluation is requested
Permit offers to be evaluated against the declared criteria
Set out the acceptance criteria
Provide a fair opportunity for all potential suppliers to submit offers
Not discriminate against or be biased towards any supplier.

Who signs off the procurement contract?

The contract should be reviewed and signed off by a person with the necessary knowledge, experience, and authority. The review should ensure that the specification is:

Complete and accurate
Meets stakeholders’ needs
Addresses future requirements
Addresses identified risks
Complies with and addresses the issues identified by the original business case
Is capable of being met by the market
Complies with EU Procurement Directives (Public sector organisations only).

CIPS Contract Management Cycle

Our Contract Management Cycle is used to create a smooth end-to-end process, ensuring optimum scoping, planning, managing, and reviewing are taken place at the right time. Find out more about the Contract Management Cycle.

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How to write a contract