Contract Management

Contract Management


Contract management or contract administration is the management of contracts made with customers, vendors, partners, or employees. Contract management includes negotiating the terms and conditions in contracts and ensuring compliance with the terms and conditions, as well as documenting and agreeing on any changes or amendments that may arise during its implementation or execution. It can be summarized as the process of systematically and efficiently managing contract creation, execution, and analysis for the purpose of maximizing financial and operational performance and minimizing risk.[1]


contract types of varying coverage levels as full service, first look or shared, preventive maintenance (PM) only, or parts only—also loosely categorized as gold, silver, or bronze service.

With a full service contract, the contractor provides all labor, service, and parts. While similar to a full service contract, a first look contract allows biomeds the right to first inspect and repair the device if possible [ the responsibility is shared betwen biomeds and the OEM]. Remote diagnostics may help if the biomeds are semitrained or cannot acquire training until a later date. Vendor engineers gain computerized remote access to the hospital's equipment through the hospital network and aid the on-site biomed through step-by-step diagnostics. These services can be extra or written into a contract, depending on the vendor.

A PM or parts-only contract places responsibility on the contractor for supplying the parts or performing the PMs, leaving the biomedical/clinical engineering department responsible for labor.

Regardless of vendor, Correll suggests that at the very least, any service contract for PM, calibration, repairs, or even one-time repair actions address and answer the following:

  • Medical devices to be covered;
  • Whether parts and supplies are included;
  • Whether technical support is included (telephone, remote diagnostics, etc);
  • Whether, if requested, a loaner will be provided, and at what cost, if any;
  • Estimated total cost;
  • Estimated travel and labor cost;
  • Contract coverage period;
  • Three different suggested sources or manufacturers;
  • Regular business hours;
  • Response time by contractor;
  • Frequency of service PMs and calibrations;
  • How the contractors will report to biomedical/clinical engineering (a sign-in and out log, for example);
  • Circulation of service reports;
  • Accurate documentation,
  • Specifications, tolerances, and results for PMs, calibrations, and repairs;
  • HIPAA's compliance plan and violation consequences;
  • After-hours vendor response procedures for security purposes;
  • Site visit by vendor within 30 days of signing to cover installation plans (layout, room preparation drawings, and instructions);
  • Operator training from the manufacturer for both biomeds and users.[2]


  • Allow the vendor or another hospital department to reject your request to thoroughly review the prepurchase technical evaluations prior to signing;
  • Refuse your right to ensure contractual maintenance and parts replacement by monitoring contractor personnel during service events; and
  • Decline providing the clinical/biomedical department with the necessary skills, training, space, resources, or test equipment.

Smart Service Contract

Always make sure to:

  • Negotiate access or pricing for required service keys or passwords or tools;
  • Ask for training, even for third-party biomed staff if not in-house;
  • Remove any expiration dates for you to achieve service or user training;
  • Indicate the vendor's obligation to provide promised training within a stated time frame;
  • Avoid invalidating the warranty or voiding any other contract provisions during system installation or repairs;
  • Avoid paying for expensive glassware coverage in the first reliable years;
  • Locate and understand the 60-, 90-, or 120-day out-clauses; and
  • Calculate in advance any potential retroactive charges should you fault under a long-term, discounted agreement.[3]


  1. "Best Practices in Contract Management: Strategies for Optimizing Business Relationships<". Aberdeen Group. Retrieved 2008-07-10.
  2. Correll, C., Keeley, B., Soleta, M. 24x7 <ag. "Essentially Smart Contracts". Feb 2009.
  3. Correll, C., Keeley, B., Soleta, M. 24x7 <ag. "Essentially Smart Contracts". Feb 2009.


See also