Contract Management – A Review of Documents and Processes

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Many consultants ask me why they can’t be submitted to a certain client by their firm.  Others inquire on why rates are so low or why some roles offer remote work and others don’t.  Variations of conditions of a contract are pre-determined via a series of agreements.  Understanding all the work that your firm does to manage consultant contracts can be beneficial to you.

Below is an in-depth look at the various agreements and processes that firms all follow.  Familiarize yourself with these terms and acronyms.  You’ll have a far more in depth understanding of the potential contract you are talking to your firm about.

Request for Proposal (RFP)

Most clients begin their projects by looking at external staffing needs and sending out a request for proposal (RFP) to firms.  Some client’s may select firms they are inviting to bid based on vendor referrals, KLAS ratings, and/or past work history.  State or Community Hospitals open up the RFP to anyone who would like to respond.  The RFP typically includes a history of the client, a summary of the project, timelines of the project, listing of all potential roles needed to be filled, and requirements for those roles.

All firms’ responses will also include a history of the firm and a summary of the type of services offered.  Firms will vary their responses to align with the specific needs of the project.  You would see one type of response for a full implementation support RFP and another for let’s say a Community Connect RFP.  What is consistent across responses is a competitive pricing proposal whether that is in hourly rates, all-inclusive rates, or sometimes even a fixed fee.  Based on the RFP, there may be questions on everything from where has the firm provided services before, how do they obtain and retain talent, recruiting practices, size of practice, request for references, and much more.

If being asked to provide a resume as part of a submittal of an RFP, be sure your firm is being transparent with you.  So many firms will ask for right to represent and make you think you are locked into them.  That wouldn’t be appropriate at all.  What if the firm that presents you is not selected?  I should also mention that many times the client may take weeks or even months to make a decision.  Therefore, how could you possibly be locked into any single firm?  The likeliness of you still being available all that time later is minimal.

Master Service Agreement (MSA)

All clients require a firm sign a service agreement before they can provide resources.  A MSA is what determines what kind of services a firm may provide and the processes for doing so.  Typically based on the RFP selection, firms are offered to agree to the terms of the MSA once selected.  The MSA highlights requirements of the client for behind the scenes including insurance coverage, invoicing, contract processes, renewals, extensions, early releases, etc.  The agreement will often include the process for consultant submittals and the format in which they want to receive information on the consultant.  Clients will limit the number of service agreements, usually. Meaning you may hear of an opportunity at a client from another firm, but your firm doesn’t have it because they don’t have an MSA with that client.

Another way a MSA may impact a consultant is limitations of services outlined within the agreement.  Often time’s clients will award a firm to provide one type of resource but not another. Let’s use trainers as an example.  If my firm wins an RFP for training and activation support, my MSA will state I can provide those types of consultants but not builders or other roles. This is typically true for major implementations.  For example, a current RFP that is out there for the University of Illinois has 4 types of service offerings.  Winners for each of those areas would have a MSA that permits them to submit candidates for engagements within that specific service.

Vendor Management Systems (VMS)

Many clients have decided to use a third party agency to assist with managed services of their outsourcing needs.  Managed service companies will use a vendor management system (VMS) to enter opportunities, collect submittals and resumes, and literally oversee the entire selection process for each engagement.  RightSourcing is one example of such an agency.  They have VMS partnerships with companies including PeopleFluent, Fieldglass and WAND.  When a client uses a managed services agency, all communication is handled through them, not the client.

Benefits the client are simple.  The agency will use the VMS to manage all aspects of consultant services including: sourcing, selection process, budget management, duration control, compliance/onboarding, payment management, billing and invoices, off boarding, evaluations, and requisition management. Many firms complain about this because it truly limits communication with the actual client.  Being submitted for opportunities through a VMS has little impact to you the consultant.  But understanding your client’s management system process should be shared with you.

One other thing to mention is that Managed Services charge x% off each hour billed.  Typically around 3% which means the hourly rate we offer the client directly impacts the firm’s margins.

Purchase Orders (PO) or Work Orders

A purchase or work order is a document that acts as the first official offer issued by the consultant firm to the client, indicating types of resources, quantities, and agreed prices for services. Work orders and invoices are used when a company or contractor performs services for customers and bills them for those services. A work order is sometimes called a purchase order, which is also used when a customer typically wants to buy specific deliverables rather than staffing services. These are used to control the purchasing of services from external staffing firms, typically by pre estimating professional fees and expenses.  A work order needs to be updated when those funds are exhausted and/or extensions are requested.

In addition, the client will always clearly and explicitly communicate their requests to the consultant firm so there is no confusion when the purchase or work order is received. This means it would include agreed on bill rates, per Diem, travel expenses (how often you can go home), and timing of billing.  In the event the client refuses payment, the consultant firm is protected because the purchase order is a binding contract between both parties.


Finally, an invoice is a document sent by the firm to the client on a bi-weekly or monthly basis.  It is a summary of the services and/or actual hours and expenses offered to the client.  It’s basically a bill for each hour the consultant(s) has worked within the billing timeframe.  It is the responsibility of the firm to monitor hours billed and assure they align with actual hours worked.  Many firms require consultants provide status reports to document completed work in order to justify hours billed.

Invoices are very specific and typically include:

  • the date the invoice is issued
  • the name and address of the consultant firm
  • the name and address of the client
  • the invoice number
  • the purchase or work order number
  • details and quantity of hours provided
  • the agreed-upon prices
  • any discounts or taxes
  • the total amount that is due
  • transaction terms and conditions (optional)
  • payment due date

All these documents and processes require a lot of different people to manage.  Hopefully having this glance into the behind the scenes activities was helpful.  Please feel free to leave comments, questions, or request for additional information below.

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