What is a Contract Specialist?
Contract specialists, also known as contract administrators or simply contract managers, are professionals tasked with the preparation, negotiation, execution, and eventual closeout of important contracts for a business or organization. These individuals are typically attorneys or business professionals with training and experience in business law, procurement, and contract management.
Generally, a contract specialist will hold a position in a legal department or supply chain/distribution department for a business organization. They can also work outside of corporations, for government agencies, universities, hospitals, and non-profit groups.
A contract specialist is an important position for any company, as they play a part in the company’s various departments and government agencies in that, through analysis and documentation, contract specialists are responsible for keeping track of current, proposed, and potential future contracts .
Individuals in this position help their organizations avoid risks and costs by ensuring that contracts protect the company’s best interests, are clearly laid out so that all parties are aware of the terms, and are drafted to account for any potential pitfalls. Whether they’re drafting a contract from scratch or negotiating with a third party, these specialists have a hand in many different areas of the contract management process, making their role a critical one.
Particularly in the case of government contracts, contract specialists are responsible for negotiating with a variety of government agencies and ensuring that the contracts they are working on comply with all applicable federal regulations (i.e., FAR, DFARS, etc.).
Contract Specialist Roles and Responsibilities
The key responsibilities of a contract specialist are to assist with the negotiation and drafting of contracts, ensure that all obligations are met, and track contract terms and milestones. Their primary role is to develop and manage contracts in such a way as to benefit their employers while also following best practices.
One of the most important roles of a contract specialist is to develop contracts. This entails negotiating the terms of a deal, and then writing up the contract. Negotiation strategies vary depending on the type of contract, and the negotiators usually have set parameters and goals that they strive to meet. Once an agreement is reached, the specialist writes a formal contract based on that agreement. This phase also includes changing contracts as needed.
Contract specialists oversee existing contracts. Whether the contract has already been signed or not, the specialist will keep an eye on it as it progresses, determining if the contract is being fulfilled as per the original agreement. The specialists are responsible for ensuring that obligations of both parties are met. They will also inform stakeholders if any problems arise, or if they see a potential breach of contract that could occur if actions are not taken.
It is part of a contract specialist’s job to ensure that all contracts are legally compliant. It’s often difficult for businesses to draft contracts that are legally binding, as there are many stringent details that must be followed precisely in order for a contract to stand up in court. A contract specialist will assess each contract, and make recommendations if changes are needed. They also ensure that stakeholders understand the legal implications of each contract.
Skills and Qualifications of a Contract Specialist
Attention to detail is critical. In the world of contracting there is arguably no other role where the devil is in the details more than it is with a Contract Specialist. Law interpretation, contract language and the like are paramount for determining how a contract will be structured and ultimately enforced. A Contract Specialist reviewing a contract proposal may spot ambiguities or errors (or deliberate omissions) despite having no background in engineering, finance, or other disciplines. In addition, once the negotiation process begins, a Contract Specialist will review proposals for compliance in a detailed manner that not even the most diligent engineer would be able to satisfy.
Negotiation skills. Contract Specialists spend the better part of their days representing their company in the negotiation with suppliers or customers. Negotiations can last for weeks or even months and can include many individuals, including engineers, accountants, factory managers, and other subject matter experts. A Contract Specialist must be able to diffuse tension, work as a team member, and develop the kind of rapport with all parties that ensures an amicable solution to any contractual problems that arise during negotiations. A contract negotiation can make or break a company and ultimately may determine its profitability or obligation under a contract.
Legal knowledge. A Contract Specialist does not need to be a lawyer, but it certainly helps if he or she has a basic knowledge of how a contract is formed, what constitutes a legally binding agreement, and how to interpret a contract. In many cases the language of a contract will be ambiguous and open to several interpretations including legal theories that were not initially considered. A Contract Specialist must understand the legal implications of certain clauses and how courts may interpret them before they issue their analysis or decide upon a course of action with respect to a particular contract clause.
Importance of Contract Specialists to a Business
A contract specialist plays a central role in protecting and fostering the economic health of businesses. Most businesses do not have a clear idea of which terms are essential and what the risks are for a given transaction. A contract specialist performs a vital preventative function for owners, because they have the requisite background and experience to help the owner get what they want and what they pay for.
Many people consider an attorney to be a contract specialist. The primary difference between a contract specialist and an attorney is that an attorney requires a unique license to practice law, whereas a contract specialist is more similarly affiliated to an accountant. While contract specialists often discuss legal points, they are not precluded from giving legal advice. Contract specialists also are not limited to corporations, but can work with other business entities (i.e., LLC, partnerships, general partnerships, sole proprietorship, not-for-profits and government agencies) as well as other types of organizations such as established associations, churches, syndicates and joint ventures.
Career Outlook for Contract Specialists
In their early career, contract specialists typically ascend from assistant-level contract positions, such as Contracting and Procurement Assistants, and Development Assistant, to Contract Specialist Assistant and then to Contract Specialist. With experience and advancement, they may move up to Senior Contract Specialist, Contract Administrator, and Principal Contract Specialist or Senior Contract Manager. From these senior-level positions, the highest achieving contract specialists may be promoted to upper management roles such as Director of Contracts and Chief Contracts Officer .
As with many professional tracks, private industry provides high level contract specialist roles such as Director of Contracts, Senior Contract Administrator, and Director of Business Development. Though there is generally less opportunity for advancement in non-governmental organizations, private industry provides contract specialists an opportunity to gain managerial and administrative experience, which can later be leveraged to move into upper-level management positions in other administrative or business development roles.
Contract specialists can find opportunities in a variety of industries, including:
Challenges Contract Specialists Face
Contract specialists, who work closely with contracting officers on source selection and negotiation, face a number of challenges in their daily work. Because determining the best offer is often an iterative process, tracking and managing each step is critical to the process. The implementation of the Federal Acquisition Streamlining Act and ensuing Federal Acquisition Reform Act has also placed additional burdens on contract specialists, including with managing contract proposals, providing the necessary documentation for contract files, ensuring compliance with various regulations, and pricing proposals based on complex discount structures. And when it comes to the myriad of source selection documentation requirements, contract specialists must be alert to detail to ensure that every step of the source selection process is documented to fully support the procurement decision. Technology has made sourcing documents more efficient, but also more complex as well. Finally, because government contracts are subject to all sorts of adoption, interpretation, and revision of laws, contract specialists must always stay current on changing rules and new regulations. The FAR and Supplements (including agency directives) are updated multiple times a year and keeping acquainted with them all is a full time job.
Contract Management Software
While many contract specialists successfully use extensive Excel spreadsheets to track data and information, software programs offer a preferred way to streamline the contract management process. Software programs often allow users to customize views and reporting options specific to their company’s needs, while providing the flexibility to initiate alerts and reminders. Those programs can reduce manual data entry, simplify reporting, and provide greater accuracy than spreadsheets, and the ability to store and access more document data than is practical on spreadsheets. Implementation of contract management systems requires careful planning to ensure that the required data and functionality is reflected in the system. It’s important to consider what information is most valuable to your business and what type of information must be tracked for regulatory or compliance purposes. Additionally, careful thought should be given to who will have access to your contract management system, both in terms of the number of users and the locations from which they will access the system. Many systems create additional costs based on the number of users. Consider if every employee who has contract related responsibilities should have access to the system and whether there are additional security concerns if they have access remotely. Additionally, whether your employees are working in one office or multiple locations, you will want to know how new users are added to the system and how quickly new users can be trained. Finally, you will want to know what kind of support and training will be provided by the vendor and if there are additional training and support costs.
The Impact of a Contract Specialist
The inclusion of a contract specialist as a consultant or in-house employee within an organization can save that organization from hidden costs and legal liabilities. A contract specialist will identify the issues and risks inherent in a given situation and provide advice about negotiating or drafting a contract to minimize these risks . A contract specialist’s attention to detail will also ensure accuracy and minimize future liabilities for the organization.
Moreover, the process of negotiating the contract will prove useful, as the contract specialist will recognize red flags, track and manage the negotiation process, and, ultimately, resolve any disputes that arise. With these benefits in mind, the value of a qualified contract specialist is obvious.