Ten Keys to Ensuring Effective Service Level Agreements in Post-Award Contract Management

Jim Bergman

Here are ten essential keys to ensuring effective Service Level Agreements (SLAs) are in place during the post-award contract management phase. These practices help transform contracts into performance-driven partnerships.

1. Define Clear, Measurable Metrics

SLAs must include quantifiable performance indicators – response times, uptime percentages, defect rates, etc. – that leave no room for ambiguity.

Do: Use SMART metrics (Specific, Measurable, Achievable, Relevant, Time-bound).

Don’t: Rely on vague terms like “reasonable effort” or “timely delivery.”

2. Align SLAs with Business Objectives

Ensure that SLA targets support broader organizational goals – customer satisfaction, operational efficiency, compliance, or innovation.

Do: Map each SLA to a strategic outcome.

Don’t: Include metrics that don’t impact business value.

3. Establish Baselines and Benchmarks

Use historical data or industry standards to set realistic performance expectations.

Do: Document baseline performance before contract execution.

Don’t: Set arbitrary thresholds without supplier input.

4. Include Escalation and Remediation Protocols

Define what happens when performance falls short – who gets notified, what actions are triggered, and how quickly.

Do: Create tiered escalation paths with timelines.

Don’t: Leave failure responses to ad hoc decisions.

5. Build in Incentives for Exceeding Standards

Encourage suppliers to go beyond minimum requirements with bonuses, recognition, or preferred status.

Do: Tie incentives to stretch goals.

Don’t: Offer rewards without clear achievement criteria.

6. Ensure SLA Ownership and Accountability

Assign internal and supplier-side owners for each SLA to drive accountability and resolution.

Do: Include SLA roles in the contract governance plan.

Don’t: Assume performance will self-manage.

7. Use Real-Time Monitoring Tools

Automated dashboards and alerts help track SLA compliance continuously, not just during reviews.

Do: Integrate SLA metrics into contract management systems.

Don’t: Rely solely on manual reporting.

8. Schedule Regular Performance Reviews

Monthly or quarterly reviews help identify trends, address issues early, and adjust SLAs as needed.

Do: Use structured agendas and documented outcomes.

Don’t: Skip reviews due to “no major issues.”

9. Include Flexibility for SLA Evolution

Business needs change – SLAs should too. Build in mechanisms for periodic updates.

Do: Include SLA revision clauses in the contract.

Don’t: Lock in metrics that may become obsolete.

10. Communicate SLAs Across Stakeholders

Ensure everyone – procurement, operations, legal, and suppliers – understands SLA expectations and implications.

Do: Provide SLA training and documentation.

Don’t: Assume stakeholders will interpret SLAs the same way.

Final Thought:

Effective SLAs are the backbone of post-award contract management. They turn promises into performance and protect both parties from ambiguity and misalignment.

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Published by Jim Bergman

Jim Bergman is a commercial contract professional with global experience spanning the USA, Latin America, UK, Europe, China, South Korea, Japan, India, SE Asia, the Middle East, Africa and Australia. He has worked on a wide range of direct and indirect spend categories in numerous sectors, developing a deep knowledge of services, goods and technology procurement and sales. Across this wide array of commodity and services experience, Jim has found the keys to success in maximizing value for money through customer-supplier relationships founded on innovative category management and strategic sourcing practices, key performance metrics and measures, as well as Total Cost of Ownership principles and collaborative contracting tenets. He has shared his knowledge through advisory engagements, as well as in developing and delivering training programs both on-line and in classrooms, in both open-enrollment and internal environments. Jim has assisted his clients through all phases and steps of contracting, negotiation, strategic sourcing and bidding processes, demonstrating value generation in excess of $250 million. His audiences and clients have included over 7,000 attorneys and commercial professionals students from over 1,000 corporations and public-sector entities.

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