Contract Management

advertisement

Contract Management

Training & Development

Contents

Introduction to Contract Management

Definition

Contract Management Issues

Activities Overview

Contract Manager: DECS

 Importance of the role

 Responsibilities

 Skills

Appointing a Contract Manager

Contract Manager Authority

Implementing a Contract

Contract Management Plan

Risk Management

Monitoring Performance

Occupational Health, Safety & Welfare

Variations

Contract Management: Key Tasks

DECS Procurement Policies & Guidelines

Introduction to Contract

Management

 Final stage of the tendering and contract cycle.

 Includes all administrative activities associated with administering a contract after it is executed.

 Level of contract management may vary from contract to contract

 Simple to Complex contracts

Contract Management Definition

 An administrative process to ensure all parties understand their responsibilities and obligations to a contract, allowing efficient and effective contract performance

 Undertaken by DECS worksites

Contract Management Issues

Relationships: buyers, suppliers & end users

Lack of preparation or contingency planning

Requirement changes

Variations to the contract

Failure to consult

Description errors

Pricing errors/omissions

Failure or refusal to perform

Suppliers experiencing financial difficulties

Delivery/transport problems

Contract Manager:

Importance of the role

 Obtain value for money

 Ensure contractual obligations met

 Improve communication

 Control risks

Contract Manager: Responsibilities

(Varies in Complexity of Contract)

 Establish Contract Management Plan

Process reviews inc Post-contract reviews

Liaise between and provide advice/information to internal managers, users & suppliers

 Monitor performance

 Accurate and timely reporting

Contract Manager: Responsibilities

(cont)

(Varies in Complexity of Contract)

 Maintain insurance policy(s) & terms and conditions

 Ensure certification and specifications are met

 Manage contract change procedures

 Resolve disputes

 Ethical standards

 Refer to Code of Ethics for the South Australian

Public Sector

Contract Manager: Skills

Skills required include:

Strategic skills

Project Management

Communication and Liaison

People Management

Negotiation

Conflict resolution

Record-keeping and File Management

Decision-making

Research and Analytical

Professionalism

Appointing a Contract Manager

Should occur prior to execution of the contract

Contract management arrangements identified and planned including:

 Responsibilities;

 Delegations;

 Reporting requirements, and;

 Relationships

 Duties and powers governed by the conditions of contract and general law

Contract Manager Authority

 Contract Manager needs a level of authority to ensure project runs smoothly

 Limited delegation to approve variations that involve extra cost.

Implementing the Contract

Consider the following:

The Contract Manager appointed

Notification to unsuccessful suppliers

Joint briefings for all relevant parties

Resources available

Copies of final contract

Initial issues requiring immediate attention

Contract Management Plan

Details how the contract is to be managed to achieve outcomes.

Depending upon complexity, Contract Management

Plans may include:

 Monitoring of compliance with contract conditions

Performance Evaluation and Reporting (e.g. KPIs,

SLAs)

Communication Strategies

Roles and Responsibilities of stakeholders

Risk Management

Financial Management

Contract Review

Contract completion and transition

Contract Management Plan (Cont

 To develop an effective Plan, need to understand contract and objectives.

 Review & gain an understanding of:

Acquisition plans

Tender documents

Specifications

Selection reports

Purchase recommendations

Records of negotiations

The contract

File notes

Risk Management Plan

Planning for & managing risks essential

Complex contracts may require a Risk

Management Plan, including:

Identification

Analysis

Evaluation

Treatment Plans

The Risk Management Plan will form part of the

Contract Management Plan

Risk Management Plan (Cont)

Types of Risks:

Changed circumstances

Communication Breakdown

Breach of Confidentiality

Breach of Intellectual Property (IP)

Breaches of Security & Privacy arrangements

Inappropriate Occupational Health, Safety & Welfare (OHS&W) management

Insurance policies may not adequately indemnify DECS – may need to determine insurances required (e.g. workers’ compensation, personal injury, public liabilty, product liability etc)

Risk Management Plan (Cont)

Types of Risks (Cont):

 Breaches of contract:

 Performance securities / guarantees not received;

Deliverables not in accordance with the contract;

Fraud;

Variations, and;

Disagreement or disputes.

 Refer DECS Guideline - Managing Risk in

Procurement for further information

Monitoring Performance

 Effective Performance Monitoring requires the

Contract Manager to:

 Establish and monitor formal KPIs and Service Level

Agreements (SLAs)

 Monitor progress

 Conduct random inspections

 Ensure all conditions and clauses are acted upon

Monitoring Performance (Cont)

 Advise Contractor of performance issues

 Develop effective feedback mechanisms

 Keep written records of all dealings with

Contractor and administration of the contract

 Maintain comprehensive documentation

Occupational Health, Safety and

Welfare (OHS&W)

 Contract Managers should:

 Monitor and audit Contractor's workplace performance

 Ensure Contractor applies appropriate level of

OHS&W management

 See DECS ‘OHS&W and Injury Management Policy’ and the ‘ DECS Code of Practice for Contractors’

( www.decs.sa.gov.au/ohs/ )

Contract Variations

 Should State (in written form):

What has been agreed;

Actual changes to the contract;

 If applicable:

Current price;

Variation amount, and;

 New price

 Ensure:

 Additional funds are available (if required)

 Appropriate approvals obtained

Variations (Cont)

 May be necessary to contractual arrangements e.g.:

 Changes to specified personnel;

 Changes to contract milestone dates;

 Changes to supplies quantities;

 Change in scope of the requirement

 Changes to specifications; and

 Introduction of new technology.

 Stakeholder consultation required

Contract Management:

Key Tasks

 Receipt and Acceptance of Variables

 Payment

 Dispute Resolution

 Complaints Procedure

 Discharge of Contract

Contract Management:

Key Tasks (Cont)

 Liquidated Damages

 Performance Evaluation and Debriefing

 Product Warranties

 Contract Completion

 Record Maintenance & Reporting

Contract Completion

Options include:

 Contract extension option

 Expiration of existing contract

 Call for new tenders

 No further requirements for goods or services

 If contract extension unnecessary; undertake transition from the contract.

Record Maintenance

Maintain comprehensive and accurate records in relation to

 Responsibilities,

 claims, payments,

 negotiations, agreed changes, incorrect deliveries, poor service,

 other significant activities.

Electronic records

Audit trail

Comply with State Records of South Australia Requirements

( www.archives.sa.gov.au

)

Reporting

 Regular/ad-hoc reporting on various aspects of departmental contracts, including:

 Supplier information

 Contract value

 Usage

 Savings

 Performance

 Improvement opportunities

Reporting (Cont)

Contract Closure Report

 For acquisitions deemed high risk and falling in

Quadrant 2 or 4 of the State Procurement Board’s

Acquisition Planning Guidelines

 Report should be prepared at completion of the contract and forwarded to Procurement Unit

DECS Procurement Policies &

Guidelines

Refer to ‘Contract Management Guidelines’

 In.decs (Procurement web pages)

 SSONet (Procurement web pages)

 Or contact Procurement Unit on 8226 1610

Download