How to Write Contracts for Procurement Professionals

Understand the important terms and conditions when drafting contracts for your organization.Procurement contracts incorporate significant provisions that will govern the relationship between the owner and the contractor. Understanding key contract provisions and negotiating reasonable terms upfront is paramount. In addition, prime contractors must flow down numerous provisions, ensure subcontractor compliance, and mitigate risk through targeted subcontract drafting. Gain an understanding of the unique challenges that owners and prime contractors face to comply with procurement contract requirements and negotiate subcontract terms with private subcontractors. This material will focus on the types of damages provisions found in both federal prime contracts and subcontracts, how to mitigate risk through flowdown provisions and indemnification clauses, and the different negotiation perspectives for prime contractors and subcontractors.

Background: Prime Contracts and Their Subcontract Counterparts • Federal Prime Contracts – Many Non-Negotiable Terms • Discussion of Other Procurement Types • Subcontracts – Can Incorporate Many Flow-Down Provisions From Federal Prime Contract, but Provide More Opportunity to Negotiate Terms • Examples of Subcontract Flow-Down Clauses and Common Negotiable Terms Identifying Risks in Prime Contracts and Subcontracts: Damages • Liquidated Damages: Prime Contracts and Subcontracts • Consequential Damages and Other Special Damages • Mitigating Risk: Flowing Down Damages and Waivers of Certain Types of Damages Indemnification Clauses • What It Means to Indemnify and Hold a Party Harmless (and Why It’s Critical) • Defense Obligations in Indemnification Clauses • Scope of Indemnification Mitigating Risk: Different Perspectives for Prime Contractors and Subcontractors • Prime Contractors Flow-Down Risk: Damages and Indemnification Provisions • Subcontractors: Limiting Indemnification Scope and Implementing Waiver of Certain Damages Ensuring Subcontractor Compliance: Flow-Down Clauses • Equal Opportunity and Other Employment Compliance • Contractor Code of Business Ethics and Conduct • Contractor Liability for Subcontractor Noncompliance