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Legal & Contracts Management

Contract Cost and Price Analysis




Introduction:

Obtaining fair and reasonable pricing from contractors and suppliers is a primary objective for all businesses and governments. Evaluating prices through Cost and Price analysis are essential skill sets in meeting these objectives those involved in these activities understand well the significant challenges in this ever-changing business environment and also that there exist significant opportunities for improvement by providing best practice competencies to all those involved in contract and procurement activities

Targeted Groups:

  • Contract Managers, Contract Engineers, Quantity Surveyors, Contract Administrators, Project Managers and Engineers, Tenders Managers
  • Buyers, Purchasing Managers, Procurement Managers
  • Engineering, Contract Holders, Construction Managers
  • Maintenance Managers and Systems Managers and all others in organizations whose leadership want world-class skills sets in those involved in contracts for the procurement of goods, equipment, construction, and service
  • Also, this course is a great way to develop those new to contracts, prepare for a major project, or use as a refresher for veterans

Course Objectives:

At the end of this course the participants will be able to:

  • Understand the Importance Of Price/Cost Analysis In Continuous Improvement Programmes
  • Recognize The Difference Between Price And Cost Analysis
  • Define Criteria For Selecting The Analysis Type
  • Explore the Methods Of Price Analysis
  • Gain Knowledge of Supplier Strategic Alliances
  • Gain Analytical Tools for Cost Drivers
  • Understand the Methods Of Cost Analysis
  • Develop "Should Cost"
  • Understand the Types Of TCO Models

Targeted Competencies:

  • Managing Cost and Prices in Volatile Market Conditions
  • Obtaining Better Pricing for the Original Contracts and Changes
  • Understanding the Methods Contractors use for Pricing
  • Understanding the Elements of Price that Make up the Price

Course Content:

Unit 1: Defining Cost Savings Opportunities:

  • Reducing The Cost Of Purchased Goods And Services
  • Contract’s Savings Impact On The Bottom Line
  • Understanding Where To Focus Your Efforts
  • Supplier Pricing Models
  • Develop Opportunity Hypotheses
  • Cost Reduction Reporting Procedure
  • Continuous Improvement Skill Sets

Unit 2: Performing Price Analysis:

  • Difference Between Cost And Price Analysis
  • Selection Tool
  • Methods Of Price Analysis
  • Historical Analysis
  • Using Price Indexes
  • Calculating Change
  • Developing the Organization’s Contract Price Index

Unit 3: Performing Cost Analysis:

  • Methods Of Cost Analysis
  • Major Elements Of Cost
  • What And How Important Are Supplier Overheads
  • Developing “Should Costs”
  • Requesting Supplier Cost Info
  • Issues In Analyzing Supplier Cost Breakdown
  • How much Profit should the Supplier make

Unit 4: Other Important Valuation Criteria:

  • Industry Analysis
  • Global Industrial Labor Rates
  • Working With Currency Exchange Rates
  • Total Costs Of Ownership Models
  • Reengineering Processes to reduce Cost
  • Cost Volume Profit Analysis
  • Defining Value Analysis?

Unit 5: Controlling Contract Pricing in Volatile Markets:

  • Dealing in Volatile Economic Situations
  • Contract Economic Adjustment Clauses
  • Continuous Improvement Methods
  • Early Supplier Involvement
  • Reducing Waste In The Supply Chain
  • Savings Reporting
  • Get The Big Savings Now