Contract Negotiation and Management – Standard Operating Procedure

1) Purpose

To establish guidelines for negotiating contracts with suppliers and managing contract terms to ensure compliance and optimal business outcomes.

2) Scope

This SOP applies to contract negotiation and management activities within the pharmaceutical purchase department.

3) Responsibilities

Procurement Manager: Responsible for leading contract negotiations.
Legal Department: Responsible for reviewing and approving contracts.

4) Procedure

4.1) Needs Assessment:
4.1.1) Identify requirements and objectives for the procurement contract.
4.1.2) Determine key performance indicators (KPIs) and deliverables.

4.2) Supplier Selection:
4.2.1) Assess potential suppliers based on capability and suitability.
4.2.2) Shortlist suppliers for contract negotiations.

4.3) Negotiation Planning:
4.3.1) Plan negotiation strategy including objectives and fallback positions.
4.3.2) Prepare negotiation team and documentation.

4.4) Contract Negotiation:
4.4.1) Conduct negotiations with selected supplier(s) to reach agreement on terms and conditions.
4.4.2) Document agreed-upon terms and obtain signatures.

4.5) Contract Management:
4.5.1) Communicate contract terms to relevant departments.
4.5.2) Monitor supplier performance and compliance throughout contract duration.

5) Abbreviations, if any

N/A

6) Documents, if any

• Contract Negotiation Plan
• Contract Templates
• Contract Approval Forms

7) Reference, if any

Regulatory Guidelines: