The initial confidentiality agreement, concluded during the agreement to conclude the contract, is used to protect negotiations with suppliers, Banas said. “The categories of contracts defined for the acquisition of the fleet are generally based on the type of order and the types of products and services purchased. Different categories may include recommendation agreements, reseller agreements, master product or service agreements (products, professionals, legal, financial, training, personnel, contractors, and other services), and software licensing agreements,” said Barbara Banas, Senior Director of Procurement at Wheels, Inc. The terms of the contract may be changed, which may be due to a change in the operation of the supplier or if the relationship between the fleet is compromised in one way or another. One of the main objectives of the fleet contract is to determine the type of relationship that the fleet wishes to have with its supplier or supplier. Early understanding of the supplier and negotiation strategies are essential elements in the design of a fleet contract, as some elements of a supplier and negotiation strategies are relevant to establishing an ideal contract. “If the leasing structure is a common leasing in North America, you`ll need a Master Services Agreement (MSA) to cover things like fuel and maintenance, and then a Master Lease Agreement (MLA) to cover the terms of the financial lease,” the fleet manager said. “If the leasing structure is an operational contract, it would only take an MLA and perhaps a variation agreement to change the wording of the MLA as written. Another type of contract that fleet managers can execute is an International Framework Agreement (IFA) that covers conditions such as Account Management, which are relevant to CMFs and are used by a company for their fleets in multiple countries.

“Guaranteeing contracts that meet a company`s purchasing needs – and ensuring the right steps to succeed – remains fundamental to the fleet acquisition process. An effective process is put in place when we can engage with the company`s leading procurement specialists and stakeholders, understand supplier and supplier negotiation strategies, and measure key performance indicators (KPIs). The implementation of a Request for Information (RFI) and a Request for Supply (RFP) is essential to guarantee the fleet contract and can ensure that fleets procure the most competitive products and services. Fleets and fleet management companies can work together to develop ideal contract models for certain purchasing needs, Banas said: “A strong set of PPCs are the guarantee of supply, quality, service, cost, innovation, relationship – commonly referred to as AQSCIR,” the fleet manager said. “Service Level Agreements (SLAs) can be created from PCCs and become part of the contract. There should also be financial penalties if the provider does not meet a certain score in the PSIs or complete an SLA. “It is extremely beneficial for fleet management companies to establish a model contract for each purchase category specific to their company,” she said. “General categories for fleet management companies typically include assets, maintenance, traders, leasing, auctions, transportation, subscriptions, and professional services, among many others.” “The terms of a contract can change absolutely in new circumstances – like new leaders, new corporate/financial goals, corporate cash flow,” the anonymous fleet manager said. I found that the contract amendment was most effective when the managers and the general counsel communicated the needs directly to the supplier. Important stakeholders should be involved in the development of draft contracts, including members of experts in public procurement, legal, risk and information technology, as well as category experts.

Related: How to Reduce Costs and Maintain an Efficient Fleet Assessing the risk of cooperation with the supplier is another important element to consider when defining the protective measures that are part of a draft contract, Banas added. . . .