Contract management and continual improvement based on ISO 20400
Domain 7 closes the loop: contract management under Clause 9.6 together with the improvement cycle in Clause 8.4.
Managing the contract
Clauses only matter if they are monitored. Build in:
- Clear obligations: KPIs, reporting frequency, data format, verification method.
- Relationship: named contacts on both sides, scheduled reviews, escalation route.
- Incentives and consequences: bonus or malus, improvement plans, termination for persistent breach.
- Change control: substitution of materials, chemicals or subcontractors requires approval.
- Exit: data return, transition support, asset recovery.
Continual improvement
Every contract cycle generates lessons: criteria that did not discriminate, data that could not be collected, clauses that proved unenforceable. These feed back into specification and strategy - the loop from Clause 9 back to Clause 6.
Worked example
A bank's facilities contract includes a quarterly sustainability review, energy use per square metre, waste diversion rate, and a clause requiring approval before any cleaning chemical change. Year one diversion reaches 48% against a 60% target. The review finds the waste contractor's reporting excludes two sites, so the metric was wrong rather than the performance. The contract is varied to standardise reporting, and the same requirement is written into the next three contracts before they go to tender.
Traps
- Signing and forgetting, with no monitoring resource allocated at award stage.
- KPIs with no baseline, no verification mechanism and no consequence.
- Contract changes made informally and never documented.
- Termination rights that exist on paper but are never tested.
- Failing to capture lessons, so the same specification error repeats.