Training & Development

Contents
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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
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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
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(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:
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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
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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
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Consider the following:
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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
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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
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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:
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Acquisition plans
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Tender documents
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Specifications
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Selection reports
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Purchase recommendations
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Records of negotiations
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The contract
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File notes

Risk Management Plan
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Planning for & managing risks essential
Complex contracts may require a Risk
Management Plan, including:
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Identification
Analysis
Evaluation
Treatment Plans
The Risk Management Plan will form part of the
Contract Management Plan

Risk Management Plan (Cont)
Types of Risks:
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Changed circumstances
Communication Breakdown
Breach of Confidentiality
Breach of Intellectual Property (IP)
Breaches of Security & Privacy arrangements
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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;
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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):
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What has been agreed;
Actual changes to the contract;
 If applicable:
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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
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Maintain comprehensive and accurate records in relation to
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 claims, payments,
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 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
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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