What Are the 3 Phases of Contract Lifecycle Management? Pre-Award, Award & Post-Award Explained

What Are the 3 Phases of Contract Lifecycle Management?

These phases can be categorized as:

1. Pre-award: when a proposal is being prepared and the terms are agreed upon.
2. Award: when the agreed terms are negotiated and the contract is signed.
3. Post-award: when the performance of the contract is managed from signing to termination.

Each phase involves crucial activities, with each activity performed by procurement and legal.

How Do CLM Frameworks Differ? A Comparison of the 3-Phase, 7-Stage, and IACCM Models

Different organizations describe the contract lifecycle differently:

The 3-phase process described in this article is consistent with the process outlined in the federal procurement framework under Federal Acquisition Regulation in the United States, and is one of the most commonly adopted frameworks for CLM software implementations. There are no differences in substance between these three frameworks – only in granularity.

What Happens During Phase 1: Pre-Award?

The pre-award process is the core of the lifecycle. For buyers, this process involves requirement definition, market research, risk assessment, and preparation of a solicitation. From the seller’s side, this process involves developing a proposal and making the decision about bidding for this contract.

Pre-Award Phase Checklist:

• Define scope of work and requirements
• Perform market research and competitive analysis
• Identify key risk areas
• Create contracting strategy and schedule
• Prepare and issue solicitation (for buyer), or develop offer (for seller)
• Review for regulatory compliance before submission

What Happens During Phase 2: Award?

Phase 2 of the contract lifecycle is the award phase, in which proposals are analyzed, negotiations are carried out, and finally the execution of the agreement is executed. The process can be very fast for simple contracts, but it may take a long period for valuable contracts.

Award Phase Checklist:

• Comparison of offers
• Price analysis and clarification
• Risk assessment through legal analysis
• Contract negotiation and redlining
• Execution via wet signature or e-signature integration

Signing process whether in person or through electronic signature using systems such as DocuSign or Adobe Sign that are part of Dock 365 CLM platform.

What Happens During Phase 3: Post-Award?

Post-award is the most time-consuming and operationally complex phase. The monitoring of contracts is required to ensure that the parties adhere to their contractual commitments and perform in accordance with contract terms.

Core post-award activities and responsible parties:

Centralized document storage in digital form, such as the repository provided by the CLM solution of Dock 365 based on SharePoint technology, maintains versioning and auditing of documentation for all stakeholders involved in the post-award process.

Why Does Standardizing All Three CLM Phases Matter for Business Results?

Inconsistency in the execution of any one phase poses a growing risk: the pre-award process will result in poorly-specified contracts, the award phase results in unfavorable terms being accepted, and the post-award phase results in renewal issues, non-compliance, and loss of revenue.

The standardization of all phases using specific CLM software produces real benefits:

• Reduced cycle times: automation of workflows ensures no manual pass-off between phases
• Reduced risk: obligation management and alerts ensure there are no surprises in the post-award phase
• Greater compliance: templates and approval gates ensure requirements are met during each phase
• Improved data: single database provides leadership with visibility of all contracts

How Does CLM Software Streamline Each Phase?

As the number of agreements in each phase increases, it becomes difficult to manage. With multiple departments being involved in the process (procurement, legal, and finance), it becomes imperative to have a single, cloud-secure document management system.

Without a contract management platform, contributors run the risk of taking actions without relying on the information available from the contracts, like missing auto-renewals. The Dock 365 Contract Management System serves as a cloud-secure document management system that allows the user to view the contracts at any point of time from any device.

Managing three phases in procurement, legal, and finance becomes difficult without having a single platform. Schedule a demo to understand how Dock 365 keeps all three organized in one Microsoft 365 native platform.