What are performance metrics used for in contract management?

Performance metrics are essential tools in contract management as they provide quantifiable measures to assess the effectiveness of contract performance. They help in evaluating how well the parties are adhering to the agreed terms of the contract by tracking specific outcomes, such as delivery timelines, quality of work, cost management, and compliance with regulations.

By using these metrics, organizations can gain insights into whether the expected results are being achieved, which can inform decision-making, identify areas for improvement, and ensure that contract objectives are met. This process contributes to maintaining accountability and facilitates communication between the contracting parties, ultimately leading to better contract management and performance oversight.

The other choices focus on different aspects of contract activities but do not capture the primary purpose of performance metrics in monitoring and evaluating the effectiveness of contract obligations and achievements. Metrics are specifically designed to assess performance rather than to negotiate terms or increase profits directly.