8 Crucial Items for Your Procurement Contract Review Checklist By Onit July 1, 2020 AI/ML,Business Process Management 4 Minute Read No matter what company you work for or which industry you’re part of, procurement contract review is likely part of your daily life as a member of the legal team. Whether it’s ordering basic office supplies to keep your workplace running or more complicated like buying raw materials in bulk for multiple products, you should have a procurement process in place to make the purchasing process move smoothly. Procurement is an important element of a company’s overall corporate strategy as it directly relates to the bottom line. Given the required collaboration between multiple departments, it’s important to have a procurement contract review checklist available to make sure the legal document’s terms are in line with corporate standards, helping avoid any delays or rejection of procurement. Here are the top 8 things you should look for when redlining a procurement contract. Determine the level of delegated authority. Nail down who is responsible in your organization for routine purchases, who controls the acquisition of all the company’s requirements, etc. Define cost restraints. Establish the types of commitment and pre-set financial limits that staff are permitted to enter into so it’s clear for the legal team reviewing. Doublecheck the basics. It’s easy to get bogged down in the minutiae of the contract, but don’t forget about the nuts and bolts: parties’ names, price and dates/deadlines. Look for automatic renewals. Get familiar with the steps your company will need to take if you do not want the procurement contract to renew, and any associated penalties. If you do make the call to let the contract auto-renew, verify that the terms are favorable for your organization and are fair to both parties. Put safety and quality first. Part of your job is to ensure that only reputable suppliers are used. Make sure to include contractual obligations such as compliance with local health and safety laws and require updates regarding safety information for substances and industrial products directly in purchasing documents. Search for how changes will be processed. Requiring advance written notice for processing changes in purchase orders to the organization is always advisable. Verify the duration of the contract. Determining your corporate standards for the duration of contract is an important legal detail. Whether it be 12 months or 36 months, make sure the entire legal team is aware and on the lookout for the duration clause during the legal contract review process. Implementing a procurement contract checklist in your contract review workflow can help avoid costly mistakes. However, the best way to ensure that no stone (or legal clause) is left unturned is to supplement the human lawyer’s efforts with legal automation technology. There are many types of contracts that are related to the procurement and supply chain world. ReviewAI now supports the following: Purchase and Supply Review: Quickly check for common key issues when reviewing purchase and supply agreements such as payment terms, warranties and termination rights. Statement of Work: Save time reviewing statements of work by being alerted to common issues, such as termination, liability and dispute resolution procedures. Letters of Engagement: Use this review to quickly check for key issues in engagement letters, including scope of service, payment terms and warranties. In addition, the new procurement skillset automatically takes you to the key issues when engaging in procurement-focused contracts and helps you understand your contractual obligations. You can use this skillset to build reviews to evaluate your supply chain, risk exposure and contract management lifecycle. As you start defining your internal contract review process, be sure to arm yourself with the best legal technology and knowledge to improve efficiency, decrease risk and promote effective procurement. Learn how ReviewAI can help. Today's Popular Post Business Process Management The Next Steps for DEI in Legal: A Conversation with JusticeBid Read More Business Process Management The Power of Intelligent CLM: Leveraging AI to Optimize Contract Management Read More Bodhala Introducing Bodhala’s New Benchmarking Solutions Read More Subscribe Today Sign up for updates on new posts from our blog. Related Readings Business Process Management The Next Steps for DEI in Legal: A Conversation with JusticeBid Read More Business Process Management The Power of Intelligent CLM: Leveraging AI to Optimize Contract Management Read More Bodhala Introducing Bodhala’s New Benchmarking Solutions Read More Thank you for subscribing!