ISO 9001 Contract Review Checklist Template

ISO 9001 Contract Review Checklist Template: A Guide to Implementation

Organizations operating in competitive environments must deliver high-quality products and services to remain successful. ISO 9001 is a set of quality management standards that help an organization ensure that its products and services are consistently of high quality. One of the stages in ISO 9001 quality management system is “contract review.” This process is done to determine whether the organization can meet the specified customer requirements. This article discusses the concept of contract review, provides examples of elements of a contract review, explains the benefits of using a contract review checklist template, and describes how to develop a contract review checklist template.

Why Conduct Contract Review in ISO 9001?

ISO 9001 clause 8.2 “Requirements for Products and Services” requires that an organization should perform a review of requirements for products and services to determine that the organization can meet stated, as well as any implied requirements for products and services. Below are some of the reasons why the contract review is important for an organization.

To Ensure Customer Satisfaction

The main objective of ISO 9001 is to ensure customer satisfaction. The contract review ensures that requirements stated by customers for products and services, as well as those not stated, but necessary for the specified or intended use, will be met. Furthermore, the contract review ensures that statutory and regulatory requirements that pertain to products and services are met.

To Mitigate Risks and Avoid Non-Conformities

When an organization agrees to provide goods or services to a customer without reviewing the contract, it may face numerous problems. For example, it may find out that it does not have the resources to produce the goods or provide the services. By performing a contract review, an organization can analyze potential problems and mitigate them to avoid project delays, reworks, customer complaints, and additional costs.

To Ensure Proper Allocation of Resources

By analyzing what the customer expects from the organization, the latter can estimate whether it will be capable of fulfilling the contract and, if so, with what costs and within what timeframe. This allows the organization to identify the resources that will be required to execute the contract successfully.

To Meet Legal and Regulatory Requirements

A contract may have various legal and regulatory requirements depending on the product or service. The organization must know these requirements to fulfill the contract successfully.

Elements of Contract Review According to ISO 9001

The elements of contract review according to ISO 9001 are stated below.

Understanding Customer Requirements (Stated, Implied, Statutory)

The first element of the contract review is to ensure that the customer’s requirements are understood. These requirements can be divided into several categories. First, the stated requirements should be clear and understood by both parties. Second, implied requirements should be defined by both parties as well. Third, statutory and regulatory requirements should be identified.

Determining the Organization’s Ability and Resources

The second element of the contract review is to determine whether the organization has the necessary resources to execute the contract. The resources can include personnel, equipment, and external providers.

Addressing Differences Between Tender and Contract

The third element is to ensure that there are no differences between the tender and the contract. A tender is a document provided by the organization to the customer indicating the scope of work, delivery schedules, costs, and other details.

Addressing Risks

Fourth, the potential risks associated with the contract should be reviewed during the contract review. The risks can include technical, operational, and financial risks.

Communication

Fifth, the parties should discuss how effective communication between them will be ensured.

Benefits of Contract Review Checklist Template

As mentioned above, the contract review is one of the stages of the quality management system specified by ISO 9001. This standard specifies what should be done during the contract review, but it does not specify how to do it. In this regard, developing a contract review checklist template for the organization would be a good idea. The benefits of using a contract review checklist template are discussed below.

Ensuring Standardization

Using a contract review checklist template ensures that the contract review will be standardized and that the same requirements will be reviewed every time.

Avoiding Errors and Omissions

Having a contract review checklist template helps avoid errors and omissions during the contract review which may negatively impact the execution of the contract.

Making the Contract Review Easier

A contract review checklist template makes the contract review easier by providing clear instructions to the personnel performing the review. Furthermore, the template ensures that all the questions that should be answered during the contract review are asked.

Providing Objective Evidence of Contract Review

The contract review should be documented as objective evidence that the contract review was performed. The completed contract review template can be used for this purpose.

How to Develop ISO 9001 Contract Review Checklist Template

Below are some steps that should be taken when developing a contract review template for an organization.

1. Understand ISO 9001 Requirements

First, it is necessary to understand ISO 9001 requirements related to contract review. In particular, pay attention to clause 8.2 of the standard. Then, based on the requirements of clause 8.2, identify the questions that should be asked during the contract review. Furthermore, the contract review should address the requirements of the contract between the buyer and the seller. Thus, ensure that the questions in the contract review template cover these requirements as well.

2. Customize the Contract Review Template According to the Organization’s Needs

There is no single contract review template that is suitable for all organizations. To develop an appropriate contract review template, customize the generic contract review template provided below based on the needs of the organization.

3. Specify Questions

Each element identified in the previous step should become a separate question in the contract review template. It is important to write the questions clearly so that they can be understood by all personnel. Furthermore, leave space for providing answers and comments.

4. Specify Responsibilities and Approval Authority

Clearly specify the responsibilities of the personnel involved in the contract review process and the approval authority.

ISO 9001 Contract Review Checklist Template (with Examples)

Below is a generic ISO 9001 contract review checklist template that can be used by an organization. Furthermore, the elements of a contract review are discussed in detail and examples of questions related to these elements are provided.

ISO 9001 Contract Review Checklist Template

• Contract/Project name: _________________________.

• Customer name: _________________________.

• Date of review: _________________________.

• Reviewer(s): _________________________.

Customer Requirements Verification

• Is the following information provided by the customer? Are the following requirements understood?
  
  

• Are the following requirements specified by the customer?
  
  

• Are the following requirements not specified by the customer, but are necessary for the specified or intended use?
  
  

• Are the following statutory and regulatory requirements specified?
  
  

• Are the following requirements for delivery and post-delivery activities specified by the customer?
  
  

• Have any new or changed requirements resulted from the contract review?

Organizational Capability Assessment

• Does the organization have the necessary resources to meet the contract requirements?
  
  

• Do the personnel have the required competence to meet the contract requirements?
  
  

• Can the organization meet the requested delivery schedules and timelines?
  
  

• Are any external providers (subcontractors) required? If yes, have their capabilities been assessed?
  
  

• Is the financial viability of the contract assessed?

Resolution of Differences

• Are there any differences between the requirements in the tender/proposal and those in the proposed contract?
  
  

• Have all the differences been addressed with the customer? Are the differences resolved and documented?
  
  

• Has the customer been informed of any changes or deviations accepted by the organization?

Risk Identification and Mitigation

• Have the potential risks (technical, operational, financial) associated with the contract been identified?
  
  

• Are there any mitigation strategies or action plans to deal with potential risks?
  
  

• Is there a clear understanding of potential liabilities (responsibilities)?

Documentation and Approval

• Is contract review documented and complete?
  
  

• Has the review been approved by the authorized person (e.g., Sales Manager, Operations Manager, and Technical Lead)? Have communication channels been identified and documented?

Post-Review Actions and Change Management

• Are any action items identified for prior action before contract acceptance (e.g., acquisition of resources, development of procedures)?
  
  

• Is there a process for reviewing and approving changes to a contract after acceptance?
  
  

• Are records of contract review maintained as objective evidence?

How to Use ISO 9001 Contract Review Checklist Template in an Organization?

To ensure that the contract review is performed correctly and consistently, it is important to train the personnel that are responsible for conducting contract reviews. Furthermore, it is important to ensure that contract review is integrated into the overall quality management system of the organization. In this regard, it may be useful to consult with other department heads to ensure that the contract review process is aligned with other processes such as sales, operations, design and development, and purchasing. Finally, it is important to monitor the effectiveness of the contract review process by identifying whether there are any shortcomings or areas of improvement. It is also recommended to update the contract review process and template based on the results of the analysis.