The roles of contract administrator and contract manager are easily confused. If your job doesn’t touch on either function, you’re likely to conclude that they’re the same job. In a similar way that one might also conflate “website designer” with “webmaster,” these are two different job function, although they require similar skills.
What are the main differences between a Contract Administrator and a Contract Manager?
Primarily, an administrator does most of their work before the contract is signed while a manager does most of their work on existing contracts. The former comes into play at the beginning of the contract lifecycle, while the latter contributes their efforts to contract maintenance and ending the process.
Both of these roles require knowledge of contracts and their contents. Additionally, they need to know a company’s contract history and plans for the future.
One might ask, “What happens if the contract gets renewed?” In contracts with a perpetual or indefinite lifecycle, the manager may indeed hand off the contract to the administrator for the purposes of renewal, which might require a renegotiation phase.
What Does a Contract Manager do?
The contract manager is the executor of contracts. It is their job to take the legal document and turn it into a fulfilled project. This may involve any number of functions pertaining to the company’s obligations. They may initiate a project to meet a goal within the contract’s framework, or they might work in procurement where their duty is to check a bill of sale or approve a check to pay disbursement.
A contract manager must be equipped to oversee the process of a contract’s fulfillment.
What does a Contract manager do?
- Periodically review the document as questions comes up about the contract terms.
- Keeping an eye out for potential breaches and head them off before they increase the company’s risk.
- Interpret and communicate the contract terms to the rest of the company.
Contracts are written in legal language, after all, which likely will be impenetrable to employees with no legal training. Communication skills are essential for a contract manager to ensure their team fully understands the roles they need to fill, the goals of their project, and what’s at stake if they aren’t successful.
What Does a Contract Administrator do?
The contract administrator is the architect of contracts so, what does a contract administrator do?
- Contract planning and negotiation.
- Solicitation of bids from vendors.
- Review previous contracts to make corrections or reconfigure templates for the new one.
- Create standardized language and include the necessary clauses, conditions, terms, and definitions to make the contract execute exactly as it was planned.
All contracts have a defined beginning, but they are all executed differently. As such, the administrator’s job is more tightly defined. Their job is mostly over once the contract is finalized. However, the contract manager’s job is just beginning, since they must monitor the contract to ensure that the company is fulfilling its obligations.
On the other hand, the contract manager’s job is easily constrained by the terms of the contract – theirs is not to ask why, but to execute. The administrator, however, has to have the foresight and knowledge to know the most advantageous phrasing of legal terms and conditions to build effective contracts. The contract administrator has to ask all the important questions driving the contract’s purpose, including “why?”
In addition, the contract administrator needs to watch out for conflicting conditions across multiple contracts. It wouldn’t be practical to take on more commitment than the company can handle, or to agree to abide by an agreement with one company that conflicts with prior commitments to another company. It is in the administrator’s best interest to have a quick access method to review existing contracts.
The Overlap of Contract Management and Contract Administration
“Whose responsibility is this?” is a frequent question that comes up regarding unmet terms and conditions in the contract. If a contract breach occurs, is that the manager’s fault, the administrator’s fault, or a combination of both?
The manager was charged with faithfully executing the terms of the contract, but what if an unforeseen edge-case condition came up which set the manager up to fail? One could say the administrator is at fault in that case, for not putting adequate provisions into a contract to prevent exceptions from throwing things awry. But the administrator has the defense of saying that they had no warning that the contract they were drawing up exposed the company to risk. In the balance, both administrators and managers have to work together as part of a company’s contract handling process.
Contract transparency helps both administrators and managers
A contract administrator does not do their job in a vacuum. They have to be aware of the capabilities of the company upon whose behalf they are making agreements. They have to have an understanding of current obligations. The administrator must also answer to powers ranging from legal entities to executives in order to know the goals and limits of their task.
Some of the industries where a contract administrator might need to be aware of legal requirements include those which are most heavily regulated, such as:
- Fossil fuels
- Vehicle manufacturing
- Pharmaceuticals and medical
- Defense and government
Likewise, the execution of a contract requires some knowledge of regulations, but it is the administrator’s duty first and foremost to know legal boundaries and regulations so that they do not write promises into the contract that cannot legally be upheld.
Both positions benefit from contract transparency over the contract lifecycle for purposes of research, review, and the smooth proceeding of every agreement. If a problem comes up in the fulfillment of a contract, the manager might let the administrator know to take this particular issue into account when renegotiating the contract.
Smaller companies can get by with one or a few people in charge of both functions. Larger companies have to parcel out this responsibility since it becomes too much for one party to handle. Even beyond that, some companies may see a need for further separating processes, such as putting one person or department in charge of contract review or analysis.
Distinguishing roles is critical
Contracts, as we say many times, are the software of business, providing the operating provisions upon which all useful work gets done. Even if a company isn’t at the scale required to have separate roles for each, having a distinct separation of these functions helps to keep the contract process orderly, which in turn helps the company fulfill its goals with a minimum of risk and a maximum ROI.