What are the steps to take when a supplier disputes a contract change?

2 Communicate clearly and respectfully

The second step is to communicate clearly and respectfully with your supplier. Avoid blaming, accusing, or threatening them, and instead focus on finding a mutually beneficial solution. Explain your rationale and justification for the contract change, and acknowledge their concerns and feedback. Use objective and verifiable data to support your arguments, and listen actively to their perspective. Aim to maintain a positive and professional tone throughout the communication.

3 Negotiate in good faith

The third step is to negotiate in good faith with your supplier. This means being willing to compromise, collaborate, and explore creative options to resolve the dispute. Use a win-win approach that balances your needs and interests with those of your supplier, and avoid making unrealistic or unreasonable demands. Consider the long-term value and relationship with your supplier, and not just the short-term benefits or costs of the contract change. Seek to reach a fair and mutually acceptable agreement that satisfies both parties.

4 Document the agreement

The fourth step is to document the agreement reached with your supplier. This means writing down the terms and conditions of the contract change, and getting both parties to sign and date it. The document should include the scope, timeline, deliverables, responsibilities, payment, and dispute resolution clauses of the contract change. It should also specify how the contract change affects the original contract, and how any future changes will be handled. The document should be clear, concise, and consistent with the original contract.

5 Implement and monitor the contract change

The fifth step is to implement and monitor the contract change. This means following through on your commitments and obligations, and ensuring that your supplier does the same. Communicate regularly with your supplier to track the progress and performance of the contract change, and provide feedback and support as needed. Address any issues or problems that arise promptly and constructively, and celebrate any achievements or milestones. Evaluate the results and outcomes of the contract change, and learn from the experience.

6 Escalate if necessary

The sixth step is to escalate if necessary. This means taking further action if the dispute cannot be resolved through negotiation, or if the supplier breaches the contract change agreement. Depending on the severity and complexity of the dispute, you may need to involve a third party, such as a mediator, arbitrator, or lawyer, to help you reach a resolution. You may also need to exercise your rights and remedies under the original contract, such as terminating the contract, withholding payment, or suing for damages. However, these options should be used as a last resort, as they can damage your relationship with your supplier and incur additional costs and risks.