Projects usually involve multiple contracts, and project managers are often tasked with managing them. A contract management plan is key to successful contract management and can lead to better commercial outcomes.

If you’re unsure exactly what a contract management plan is, why you need one, how to create one and what to include, read on to find out.

What is a contract management plan?

A contract management plan is a working document summarising all the practical details needed to efficiently manage your agreements including objectives, milestones and key contacts.

It’s a blueprint for how to manage the contract once it’s in place. Having a plan helps to keep you in control of the process because there is upfront agreement on:

  • What will be done
  • Who will do it
  • How it will be done
  • When it will be done
  • How changes will be made
  • How the team will manage risks

Expect to refer to your contract management plan throughout the project.

Who prepares a contract management plan?

It depends on the organisation, the project and the complexity of the contract.

Some organisations have contract managers responsible for many contracts, or if the contract is highly complex, the contract manager might look after only one contract. In other projects and organisations, it will be up to the project manager to oversee the entire contract management process, including preparing and executing the contract management plan.

Why do you need a contract management plan?

Having a contract management plan helps you effectively monitor and assess contracts to realise the intended benefits and achieve your business goals. It’s also necessary for contractual, legal and auditing purposes.

Contract management plans contain all the essential details you need to implement and deliver your contract effectively, which helps:

  • monitor and mitigate risks
  • track and address performance to make sure you’re getting the intended benefits from the contract
  • communicate expectations and progress to stakeholders in plain English (compared to the hard-to
  • understand legal language of the contract)
  • provide continuity if there are personnel changes or absences
  • keep you organised
“Thinking through the logistics of managing your contract ahead of time (that is, what does the contract require by way of contractual notices, information for claims, timing for notifications) is an essential first step to avoid a dispute. Think of your contract management plan as an insurance policy against the potential for a dispute.”

David Ulbrick, Partner, Pinsent Masons

How to create a contract management plan

A contract management framework is a system that gives structure to planning contract management.

Here’s an example framework outlining six steps to create a contract management plan.

1. Define the contract scope and deliverables

Start your plan by laying out the agreed scope and deliverables of the contract. Identifying and documenting exactly what a contract needs to cover (and what it doesn’t) helps keep your work focused and avoids scope creep.

“What’s in or not in the project scope is a major source of dispute. A clear list of exclusions can avoid potentially costly problems.”

Tony Britt PMP, Special Counsel, Morrissey Law + Advisory

2. Define your delivery goals and performance measures

As with managing any project or work, knowing what success looks like is essential. What are you trying to achieve with this contract, and how will you measure that achievement? Knowing this will help you effectively communicate the value you’ve generated to the business.

3. Collect available resources

Establish an inventory of what resources are available to you to complete your contract work. This might include team members who can assist with their skills and time. Ensure that if you are allocating work, those team members have the capacity and capability to meet your deadlines.

4. Lay out roles and responsibilities

Establish who will be responsible for various deliverables and parts of the contract process early on. Determining this not only keeps everyone accountable and on track, but it helps to maintain positive relationships, as everyone is clear on the input and results they can expect from others and themselves.

5. Create a detailed timeline of delivery dates

Any plan should include a timeline of critical dates and milestones. This will help you keep the work progressing and meet your final deadline. Your timeline should consist of deadlines for specific deliverables and dates for progress updates to stakeholders.

6. Identify risks and how they can be managed

Every contract comes with some level of risk attached. Make sure you conduct a project risk assessment to anticipate the most likely and most critical problems your contract may run into. Define your risk management strategies at the same time, which could include building flexibility into your timeline or budget to account for delays and other issues. Many organisations develop a policy of risks they will and won’t accept. Don’t forget to consider any governance that may need to be observed.

Contract management planning graph

Planning your contract management


What should a contract management plan include?

Depending on the complexity of the project, contract management plans can include things like:

  • Deliverables and benefits that will be realised by the contract
  • Clear definition of what’s in and out of contract scope
  • Budget details, including payment terms and conditions
  • Definitions of industry or company acronyms or terminologies
  • Roles, responsibilities and key contact details
  • Milestones and delivery deadlines
  • Relationship management plan and meeting schedule
  • Communication plan for internal and external stakeholders
  • Description of how performance will be monitored and assessed
  • Risk identification and mitigation procedures
  • How changes will be addressed, including the process for amending the contract
  • Any governance that should be observed
  • What records must be kept, and where they will be stored
  • How issues and disputes will be managed
  • A plan for transitioning in and out of the contract, including renewal processes

State government bodies often have excellent scope management templates that you can refer to. The Victorian Government’s Contract Management Guide is a great example.

“You should always include a flow chart for every contractual process in your contract management plan. On a typical construction contract that will include process flows for handling things like latent conditions, delays, variations, changes in regulations and resolving scope ambiguities.”

David Ulbrick, Partner, Pinsent Masons

Tips for successful contract management planning

Here are David Ulbrick’s tips for creating a successful contract management plan. David is a partner at international law firm Pinsent Masons. He advises participants in the construction industry on all aspects of project delivery and dispute resolution.

The most critical thing to do is to use the contract. Sometimes construction companies and principals spend thousands (or millions) of dollars writing the contract, then completely ignore the rules of engagement across the contractual divide.

My 10 rules for better contract management are:

  1. Read the contract
  2. Read the contract
  3. Read the contract
  4. Read the contract
  5. Read the contract
  6. Take a copy of the contract (digital or hard copy) with you everywhere you go and refer to it often.
  7. Ask for help. If you don’t know what a clause in the contract means, ask for help from experts, even if that does mean asking a lawyer.
  8. Slow down but observe the contractual timelines. If the contract gives you 10 days to respond, then don’t feel compelled to respond on day one. Take your time and proofread your response.
  9. Don’t be afraid to call up clauses of the contract in your correspondence.
  10. If the contract mandates a particular format of correspondence or communication, use that format. If the format is difficult, agree to vary your contract. Remember the contract is only as good as the agreement between the two parties and can always be amended.


Building your contract management skills

Having contract management competence will boost your confidence and versatility. Successful contract management relies on many of the core project management skills you need throughout your career, like communication, leadership, stakeholder management and attention to detail. To build your contract management reputation and skills, check out the AIPM’s endorsed course directory.