As part of the Virtual NAFA I&E, experts explained how to build good contracts.
Courtney Ryan and Abby Meinke of Sourcewell noted that fleet managers have many needs and look to a number of suppliers for goods and services to fulfill their mandate. Having access to the vehicles they need to ensure that their company is able to deliver the expected services requires good contract management.
First, the manager must clearly establish the needs before issuing tenders. “From the outset, the manager or purchasing manager must take the time to consult with users. Not only will they specify their needs, such as the length of time the contract should cover, but they will also specify the services that are linked to it. It could be a one-time purchase, for a brush truck for example, or the recurring supply of equipment,” says Ryan. She points out that talking to users will inform decisions, as sometimes the purchasing department doesn’t understand why a piece of equipment is so expensive and will question the acquisition. Users will be able to explain the situation, including how this equipment will make their work easier or more efficient.
Before soliciting suppliers, it is important to have detailed expectations. What will be the delivery dates, especially if they are repetitive, the value of the contract and its duration?
Document and track
Regardless of the nature of the organization, one person should be responsible for documenting and tracking contracts. Why? “The first thing to do is to make sure that contracts are being honored,” says Meinke. “And in the case of a new acquisition, you need to have the history of exchanges with suppliers to be able to negotiate with full knowledge of the facts. What’s more, if the administrator leaves, his or her replacement must have access to this information to take over.”
Experts also mention that it can be beneficial to set up a cooperative purchasing process. Pooling purchases with other fleet managers who have similar needs can be beneficial. This can result in volume savings and fosters stronger relationships with suppliers who view you as major accounts.
Finally, both experts mention the importance of establishing effective and regular communications with suppliers. It is also important for them to know if their customers are satisfied with their products and services. “You’ll have contacts who are aware of your needs and can more easily help you if you have a problem,” says Ryan.
