The Decision for Enterprise Contract Management in a GovCon World

John Roman, VP of Contracts, Logistics Management Institute (LMI)

In today’s increasingly complex environment, an effective government contracts organization must be a customer service-oriented team that supports a broad array of customers internally and externally. The ability to access and provide accurate, timely, and flexible data to support customer needs is critical. An enterprise contract management system (ECMS) can be a critical tool to assist in this area. The contracts team is now, more than ever, the central resource for reporting, sorting, and providing data requests based on contractual documents.

Whether it is a backlog, funding data, or trend data for the CEO, client information or proposal information for business development, questions about clauses that might put the company at risk from the CFO, or information requests from government auditors, the requested data is usually buried in contract documents that need to be searched. Sometimes summary data is available in self-developed spreadsheets or internally developed corporate systems, but often the information is not available at the necessary level of detail. Reading the contract line by line is typically not an effective option—contracts are too long and too much may be missed. Finding the data requires a comprehensive review of paper or electronic contract documents and the ability to quickly target relevant language. For a small to mid-sized company, this can be an unreasonable task—hundreds or thousands of documents may need to be considered.

  We prioritized the ability to know what clauses we were subject to, across the enterprise, as a risk mitigation strategy 

Paying for enterprise-level accounting, human resources, and business development systems has been standard fare for companies for many years. Historically, funding for an ECMS is rarely available. As a result, ECMS systems are typically only found at the largest companies, and even there they may have been custom-developed internally and maintained at great expense. These systems may or may not integrate with accounting and other business systems, and the amount of data captured varies greatly. From a company perspective, what is the cost of not funding a contracts system, and is it worth the cost of implementing one? These are the questions LMI sought to answer.

At LMI, we decided to turn to the marketplace for systems developed by experts in the federal contracting field with a particular focus on the government contract (GovCon) industry that would create efficiencies for our team and integrate with other enterprise business systems. In short, our objective was to develop a business rationale that would enable us to expedite meeting the growing requirements of our internal and external customers while reducing overall company costs. This was one of many systems and process changes we were in the midst of making, so we needed to get the decision right the first time.

What Needs Were We Trying to Solve?

The GovCon industry is a highly regulated industry in which contracts are lengthy and complex, containing hundreds of clauses based upon standard sets of regulations that are continually subject to change. Tracking contract regulations and their effect on your corporation is a daunting task due to the volume of the data. We prioritized the ability to know what clauses we were subject to, across the enterprise, as a risk mitigation strategy. Our business development team needed access to key data such as clients, agency, funding, scope, team members, and past performance in order to respond to requests for proposals (RFPs). In many cases, response times for proposals are less than a week, putting additional pressure on quickly accessing information. Access to this data had been difficult and tedious without an ECMS. We were challenged to meet the response times of the important RFPs that are the lifeblood of our industry.

Other needs existed as well. The appetite for new data to calculate a variety of important metrics—from internal budgets to indirect rates and even bonus programs—required immediate access to accurate data for current operations. The many auditors in the GovCon space also expect prompt responses and access to mountains of data to measure compliance. We wanted to build an integrated solution, moving away from our current applications and processes that have required multiple inputs of the same data to disparate systems. Finally, knowing that our business and industry continue to change, we wanted to think to the future—trying to build in as much flexibility as possible.

What Did We Decide and Does It Work?

In the end, our research led us to choose a system developed specifically for the GovCon industry that integrates with our enterprise accounting system. Out of the box, SpectrumCLM by Compusearch is a Software-as-a-Service product that allows us to enter all contract clauses as well as a tremendous amount of additional contract data that we need to manage operations. We are still finalizing the total integration of the product, including its integration with the accounting system. The early returns are very good and we are already seeing efficiencies from the solution. Because it will integrate with our accounting system, contract data transfers into that system eliminating reentry, facilitating the setup of projects and ensuring consistent and accurate data in both systems. Another efficiency of the system is that it automates the integration of contract clauses between our prime contracts and our subcontracts, creating Microsoft Word documents that we can easily share to ease negotiations with subcontractors.

We have tied our ECMS into a data warehouse that further improves our access to aggregated business data in support of key decisions. Our solution provides the ability to add user-defined fields, allowing users to meet unique needs for their specific parts of our operations. In addition, the system allows us to provide increased visibility to all of our internal customers, giving them self-service options not previously available as well as transparency into the status of approval processes. Overall, we believe that the decision to implement an ECMS was the right one for LMI, and we look forward to building on the success of this solution as we continue to develop and grow.

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