Contract Management

January 5, 2018 | Author: Anonymous | Category: Business, Management, Project Management
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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


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’ (

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 ( 

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

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