Contractual Evaluation: at which stage?
A legal department is missing in smaller companies. Nevertheless clients force the SME to take on extensive contractual obligations. SME’s welcome Requests for Quotation and Invitations to Tender, but fear the terms and conditions of their client. The responsible person within the SME organization (often sales person) has to make the assessment if the commercial opportunity allows him to invest time for evaluating the contractual terms.
Quantify Commercial Opportunity
The relevance of the opportunity for the business of the SME is an important factor in deciding to make the time investment. In case the enquiry is fit for your company and not many competitors will be qualified to supply the specific goods or service, your chance of success increases. In that case it is easier to make the decision to invest time in the contractual evaluation. In case the final contract is a “nice-to-have-contract”, you might decide to skip the contractual evaluation in the first tender round. You can include risk margin and accept the terms and conditions or you might stick to your terms and conditions and hope that you will pass the first selection.
Sales person makes the difference
The client of the SME is looking for qualified suppliers. It is the role of the sales person to find out what kind of supplier the client wants. In case the client is looking for a contractor, who takes on portions of the risks involved it makes sense to go through the paperwork in an early stage. If the client is qualifying his partners on technical issues, the client might grant his supplier permission to skip the contract evaluation in the first round of tendering. The sales person is the key person in this matter. He is the one talking to the client and is able to find out his exact requirements.