Reading your contract and building the CMP
“Contract management begins before the kickoff meeting, before the first deliverable, and before the first payment. It begins the moment the contract is read.”
The contract is not a legal document filed in a drawer. It is the source document for every management decision the CM will make over the life of the contract. Every significant question a CM faces has an answer in — or traceable to — the contract.
Standard MCC contract architecture · The efficient reading sequence · The contract reference map · Reading the Description of Services and Schedule of Requirements · Financial terms and AE obligations · Building the Contract Management Plan · The CM–CA handshake
This unit takes about 14 minutes.
Standard MCC contract architecture
MCC contracts follow a structure established by the Standard Bidding Documents (SBDs). Understanding how the document is assembled helps the CM find what they need quickly.
- 1Contract Agreement. The signed document that brings the contract into force. Confirms the parties, the price, and the effective date. Always the starting point.
- 2Special Conditions of Contract (SCC). Modifications and additions to the General Conditions specific to this contract. Where the SCC and GCC conflict, the SCC prevails. Read this carefully — this is where standard terms have been customized.
- 3General Conditions of Contract (GCC). The standard MCC contractual framework: payment, variations, suspension, termination, disputes, governing law. The rules of the game.
- 4Description of Services / Schedule of Requirements. The primary scope document — the CM’s constant reference for judging whether performance is acceptable. For consulting: Description of Services (called TOR in procurement, relabelled once signed). For Goods/NCS/IT: Schedule of Requirements.
- 5Schedules and Annexes. Payment schedule, deliverables list, key personnel, reporting requirements, rates (time-based). The operational backbone: what is due, when, and for how much.
First pass — orient yourself (30 minutes): Read the Contract Agreement, the full Description of Services or Schedule of Requirements, the deliverables and payment schedule, and identify key personnel.
Second pass — understand the rules (60–90 minutes): Read the SCC in full. From the GCC, focus on payment terms, variation procedures, delay/default/suspension, and termination.
Third pass: Build your contract reference map.
The contract reference map
A one- or two-page summary the CM builds for themselves and shares with the CA. Not a substitute for reading the contract — a product of having read it.
The goal: when a question arises on a Friday afternoon, you can find the relevant clause in under two minutes. Build it in whatever format works for you. At minimum it should cover:
For goods, NCS, and IT contracts, add: delivery schedule and Incoterms, inspection/acceptance/warranty terms, LD rate and cap.
Ambiguity not resolved at the start of a contract tends to be resolved in the contractor’s favor by the time it surfaces as a dispute. If the Description of Services or Schedule of Requirements is unclear on a point that matters for acceptance, address it at kickoff and document the agreed interpretation in writing.
Reading the scope documents: consulting and goods/NCS/IT
The scope document is the primary reference for judging whether performance is acceptable. Reading it carefully at the start pays dividends throughout the contract.
For consulting contracts — five focus areas in the Description of Services:
- 1Scope clarity. Is the scope clearly bounded? Vague language — “provide support to,” “assist in,” “contribute to” — is a predictable source of dispute. Note it and agree an interpretation at kickoff.
- 2Deliverable definitions. For each deliverable: What is it? When is it due? What does “acceptable” look like? Who has authority to accept? If any answer is missing, address the gap at kickoff.
- 3Timelines and sequencing. Map deliverable dates against the calendar. Are deadlines realistic? Is the review-and-approval cycle accommodated? Does the Project Director’s sign-off fit within the review period?
- 4Key personnel requirements. Read carefully — these define the standard against which any proposed substitution is assessed.
- 5Reporting and monitoring requirements. Progress reports are the CM’s primary management tool between deliverables. A consultant who consistently submits late or thin progress reports is usually running behind schedule.
For goods, NCS, and IT contracts — five different focus areas in the Schedule of Requirements:
- 1Delivery schedule and Incoterms. Identify the Incoterm (DDP, EXW, etc.) — it determines where the supplier’s delivery obligation ends and who bears risk and cost in transit.
- 2Technical specifications and conformity. Read before the supplier delivers — not when you are deciding whether to accept. Know what a non-conforming delivery looks like.
- 3Inspection and testing requirements. Who conducts each inspection; at what stage; what documentation is required. For IT: multi-stage acceptance (FAT, SAT, final system acceptance).
- 4Warranty terms. Warranty period runs from date of acceptance, not delivery. Track expiry dates. Once a warranty expires, defect remediation is at the MCA’s cost.
- 5Liquidated damages for late delivery. LD rate, cap, and procedure for applying them. LDs must be formally applied — they do not accrue automatically.
Financial terms and AE obligations
The CM does not manage finances — but must understand enough to catch problems, ask the right questions, and make informed recommendations.
Payment structures and what they mean for the CM:
- →Fixed-price/lump sum: Payments linked to deliverable acceptance. Contractor carries cost risk. CM’s job: confirm the deliverable meets the standard before certifying payment.
- →Time-based: Payments for inputs — staff days, rates, reimbursables. MCA carries more cost risk. CM must monitor burn rate and flag early if the contract value will be exhausted before work is complete.
- →Advance payments: Not free money. Must be secured by an advance payment guarantee. Must be recovered through deductions from milestone payments. Track recovery — and track the guarantee expiry date separately.
AE obligations that, if missed, expose the MCA:
Map the full payment cycle in the CMP: CM certification → CA processing → FA verification → payment release. Each step takes time. Build contractual payment deadlines into the contract calendar.
Building the Contract Management Plan
The CMP converts your contract reading into a management framework for the life of the contract. It is a working document — not a compliance exercise — updated throughout implementation.
The CMP serves three purposes: it forces early thinking through management demands; it gives the Project Director and CA a shared reference; and it provides a contemporaneous record useful if the contract is later audited or disputed. A working CMP for a services contract of moderate complexity can be built in 15–20 pages.
Core CMP components:
- ✓Contract summary. Parties, contract value, duration, payment structure, brief scope description. One page maximum.
- ✓Roles and authorities. Who is the CM, CA, FA, PA contact, Project Director, MCC point of contact. What each person is authorized to approve or instruct.
- ✓Deliverables and payments tracker. Running table of deliverables, due dates, submission dates, review deadlines, acceptance status, and linked payments. Updated throughout.
- ✓Contract calendar. All contractual deadlines — AE and contractor — entered with responsible owners. Includes security renewals, advance payment recovery milestones, and report due dates.
- ✓Key personnel register. Names, roles, minimum time commitments. Substitution requests received and MCA decisions made.
- ✓Relationship map. Key stakeholders, what the contract needs from each, who owns each relationship, the maintenance rhythm, and the risk if it fails.
- ✓Risk register. Identified risks with likelihood, consequence, mitigation, and owner. A live document updated at each CMP review.
- ✓Issues log. Emerging and active issues with status and action required. Distinct from the risk register — these are things that have already materialized.
Strategic or high-risk contracts deserve a full CMP updated monthly. Routine contracts can use a streamlined version. The test is not whether the CMP exists — it is whether it is actually guiding your management of the contract.
If the CMP is being updated because a review is due but nothing has changed, it is probably too long. If decisions are being made about the contract that are not reflected anywhere in the CMP, it is probably incomplete.
The CM–CA handshake and knowledge check
The CM–CA handshake is the first structured conversation between the CM and CA — held before the kickoff meeting with the contracted party.
By the time the CM has read the contract and built the initial CMP, they are ready for the handshake. It covers: roles and authorities; the contract calendar (walk through every deadline and confirm who is responsible); the deliverables tracker; the full payment cycle with agreed target turnaround times; and communication protocols between formal meetings.
The goal is not a rigid division of labor — it is to ensure that every significant contractual obligation has a named owner, and that neither party assumes the other has it covered.
Knowledge check: A CM has read their contract and found that the SCC modifies the standard GCC review deadline for deliverables from 21 days to 14 days. They did not notice this when initially briefed and have been planning on 21 days. What should happen?