Contract administrator vs. contract manager: What is the difference?
The roles of contract administrator and contract manager are easily confused. If your job doesn’t touch on either function, you’re likely to conclude that they’re the same job. In a similar way that one might also conflate “website designer” with “webmaster,” these are two different job functions although they require similar skills.
What are the main differences between a contract administrator and a contract manager?
Primarily, an administrator does most of their work before the contract is signed, while a manager does most of their work on existing contracts. The former comes into play at the beginning of the contract lifecycle, while the latter contributes to contract maintenance and ending the process.
Both of these roles require knowledge of contracts and their contents. Additionally, they need to know a company’s contract history and plans for the future.
One might ask, “What happens if the contract gets renewed?” In contracts with a perpetual or indefinite lifecycle, the manager may indeed hand off the contract to the administrator for the purposes of renewal, which might require a renegotiation phase.
What does a contract manager do?
The contract manager is the executor of contracts. It is their job to take the legal document and turn it into a completed project. This may involve any number of functions pertaining to the company’s obligations. They may initiate a project to meet a goal within the contract’s framework, or they might work in procurement where they check a bill of sale or approve a check disbursement.
A contract manager must oversee the process of a contract’s fulfillment.
What does a contract manager do?
Periodically reviews the document as questions come up about contract terms
Keeps an eye out for potential breaches and heads them off before they increase the company’s risk
Interprets and communicates contract terms to the company
Contracts are written in legal language, which will likely confuse employees with no legal training. Communication skills are essential for a contract manager to ensure their team fully understands the roles they need to fill, the goals of their project, and what’s at stake if they aren’t successful.
What does a contract administrator do?
The contract administrator is the architect of contracts.
Contract planning and negotiation
Solicitation of bids from vendors
Review of previous contracts to make corrections or reconfigure templates for a new one
Create standardized language and include necessary clauses, conditions, terms, and definitions to make contracts execute exactly as planned
All contracts have a defined beginning, but they are all executed differently. As such, the administrator's job is more tightly defined. Their job is mostly over once the contract is finalized. However, the contract manager’s job is just beginning because they monitor the contract to ensure that the company fulfills its obligations.
On the other hand, the contract manager’s job is easily constrained by the terms of the contract—theirs is not to ask why but to execute. The administrator, however, has to have the foresight and knowledge to know the most advantageous phrasing of legal terms and conditions to build effective contracts. The contract administrator has to ask all the important questions driving the contract’s purpose, including “why?”
In addition, the contract administrator needs to watch out for conflicting conditions across multiple contracts. It wouldn’t be practical to take on more commitment than the company can handle or to agree to abide by an agreement with one company that conflicts with prior commitments to another company. It is in the administrator’s best interest to have a quick access method to review existing contracts.
The overlap of contract management and contract administration.
“Whose responsibility is this?” is a frequent question that comes up regarding unmet terms and conditions in the contract. If a contract breach occurs, is that the manager’s fault, the administrator’s fault, or both?
The manager was charged with faithfully executing the terms of the contract, but what if an unforeseen edge case emerges that sets up the manager to fail? One could say the administrator is at fault for not putting adequate provisions into a contract. But the administrator has the defense of saying that they had no warning that the contract exposed the company to risk. As a result, both the administrators and managers must work together.
Contract transparency helps both administrators and managers.
Contract administrators are not in a vacuum. They must be aware of the company’s capabilities in making agreements. They need to understand obligations. The administrator must also answer to legal entities and executives to know the goals and limits of their task.
A contract administrator must be aware of legal requirements in all industries, especially those that are heavily regulated:
Fossil fuels
Utilities
Vehicle manufacturing
Banking
Pharmaceuticals and medical
Defense and government
Transportation
Likewise, the execution of a contract requires some knowledge of regulations, but it is the administrator’s duty first and foremost to know legal boundaries and regulations so that they do not write promises into the contract that cannot legally be upheld.
Both positions benefit from contract transparency over the contract lifecycle for purposes of research, review, and the smooth proceeding of every agreement. If a problem comes up in the fulfillment of a contract, the manager might let the administrator know to take this particular issue into account when renegotiating the contract.
Smaller companies can get by with one or a few people in charge of both functions. Larger companies have to parcel out this responsibility since it becomes too much for one party to handle. Even beyond that, some companies may see a need for further separating processes, such as putting one person or department in charge of contract review or analysis.
Distinguishing roles is critical.
Contracts, as we say many times, are the software of business, providing the operating provisions upon which all useful work gets done. Even if a company isn’t at the scale required to have separate roles for each, having a distinct separation of these functions helps to keep the contract process orderly, which in turn helps the company fulfill its goals with a minimum of risk and a maximum ROI.