“A strong group of KPIs is the guarantee of supply, quality, service, costs, innovation, relationship – commonly known as AQSCIR,” said the fleet manager. “Service Level Agreements (SLAs) can be made from KPIs and can be part of the contract. There should also be financial penalties if the supplier does not score in the KPIs or completes an ALS. “If the leasing structure is a current capital lease in North America, you need a Master Services Agreement (MSA) to cover items such as fuel and maintenance, and then a master leasing contract (MLA) to cover the terms of the financial lease,” said the fleet manager. “If the leasing structure is an operational lease, you would only need a GW and perhaps a variation agreement to make changes to the wording of the GG 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 CME and are used by a company for their fleets in several countries. “The terms of a contract can change completely in the face of new circumstances, such as new leadership, new business/financial objectives, corporate cash flow,” said the anonymous fleet manager. I thought it would be more effective to change the contract if senior managers and the global general passed the needs directly to the seller. One of the main objectives of the fleet contract is to determine the type of relationship the fleet wishes to have with its supplier or supplier. The initial confidentiality agreement that will be reached when the contract is established is intended to protect negotiations with suppliers, Banas said. Securing contracts that meet a company`s purchasing needs – and guaranteeing good results – remain essential to the fleet`s procurement process. An effective process is possible when we are able to discuss with key suppliers and stakeholders, understand supplier strategies and negotiate with suppliers, and measure key performance indicators (KPIs). “The contract categories for the acquisition of the fleet are generally based on the type of commitment and types of products and services that are acquired. The different categories may include recommendation agreements, reseller agreements, product or service contracts (products, professionals, legal, financial, training, personnel, contractors and other services) and software licensing agreements,” said Barbara Banas, Senior Director of Wheel Procurement, Inc.
“It is extremely advantageous for fleet management companies to establish a contract model for each business-specific purchasing category,” she said.