What is the main purpose of performance reports in contract management?

Performance reports in contract management primarily serve to provide insights into contract compliance. These reports contain critical information that reflects how well the parties to the contract are adhering to the terms and conditions outlined within it. They help contract managers assess whether the deliverables meet the established criteria and whether both parties are fulfilling their obligations, such as timelines and quality standards.

The insights gathered from these reports allow stakeholders to identify potential issues or risks early in the process, facilitating timely interventions and adjustments as needed. Performance reports are essential for ongoing contract oversight and serve as a basis for decision-making, ensuring the contract’s objectives are achieved.

While analyzing legal compliance is a part of contract management, the core function of performance reports is more focused on the compliance with the contractual terms rather than the legal aspects. Similarly, determining contract value is a financial analysis that does not fall under the primary purpose of performance reports. Evaluating supplier performance is indeed a component of what performance reports might include, but it is not limited to that—hence, the broader view of contract compliance captures all aspects of compliance.