Contract Negotiation & Management

On October 13th 2020

Did you know that effective contract development and management can improve profitability by 9%? Most explosives supply contracts combine product supply with service delivery, leading to agreements that can be highly complicated, so “getting it right” should be a high priority and a contract should not be considered “done” when the tender is awarded.

To get the most from a supply contract requires management of the tender process, through to implementation and then ongoing management of the contract through its life, both from a commercial and a technical point of view.

Failure to effectively implement the contract, manage suppliers or hold them to account, can lead to loss of value by:

•  Incorrectly applied price variations over long periods

•  Use of incorrect products that are not fit for purpose

•  KPI’s not being met and regular review meetings not being held

•  Acceptance of inadequate safety standards and performance

•  Service levels being modified and changed without approval

•  Personnel levels which don’t match what is in the contract document

•  Technical goals or continuous improvement benchmarks not being reached

Contract management is an issue in most mining companies. With the day to day requirements of keeping a mine operating means there is little time to plough through a “long winded” contract with lots of legal jargon and often many points can get mis-understood, forgotten about or even just missed.

Good explosives contract management involves continuously working with your supplier, monitoring their progress, pushing them to continuously improve and taking actions to hold them accountable. In many cases, a strong working relationship with your explosives supplier can be used to drive value in the mining process, in addition to ensuring you will obtain the expected benefits from the supply arrangements.

At Moncourt Group we work with our clients to achieve their goals in relation to their commercial explosives contracts. We combine technical expertise with commercial & operational insight to ensure that clients drive real value from their contracted positions by providing the necessary support and ensuring structures and processes are in place to drive outcomes, lower the total cost of ownership and hold suppliers accountable.

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