PUBLIC PROCUREMENT
SPECIALIST COURSE
(INTERMEDIATE LEVEL)
Government Procurement Policy Board – Technical Support Office
CONTRACT ADMINISTRATION
AND MANAGEMENT
NATURE OF CONTRACT MANAGEMENT
AND CONTRACT ADMINISTRATION
CONTRACT CONTRACT
MANAGEMENT ADMINISTRATION
Relationship focus Operational focus
Strategic Tactical
Process Development Process Compliance
Longer time frame Short-term/transactional
Holistic View Narrow Focus
Driven by Added Value Driven by key Performance
Indicators
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CONTRACT MANAGEMENT
CONTRACT MANAGEMENT
Contract life cycle management
— is the process of systematically and efficiently
managing contract creation, execution and analysis
for maximizing operational and financial
performance and minimizing risk.
Based on the good practice contract management
framework developed by the UK Government, the four (4)
blocks of good contract management are:
1. Structure and resources;
2. Delivery;
3. Development; and
4. Strategy.
CONTRACT MANAGEMENT
The four (4) blocks of good contract management comprise of the
following areas that organizations should consider when planning
and delivering contract management:
1. Planning and governance
2. Market management
3. People
4. Supplier relationship management
5. Administration
6. Supplier development
7. Good practice framework
8. Relationships
9. Contract development
10. Performance
11. Risk
12. Payment
CONTRACT MANAGEMENT
Role of the Contract Manager:
1. Contract Drafting;
2. Evaluation, Negotiation and Execution;
3. Maintain contractual records and documentation such
as receipt and control of all correspondence, customer
contact information sheets, contractual changes, status
reports and other documents for all projects;
4. Provide guidance on contract matters to project
managers, including training to new project managers
and other employees in contracting procedures;
CONTRACT MANAGEMENT
5. Develop and implement procedures for contract
management and administration in compliance with
company policy. As appropriate, contribute to or
influence company policies;
6. Monitor compliance by company employees with
established procedures;
7. Work with Risk Management Department to coordinate
contractual insurance requirements.
8. Work with Finance to ensure adherence to broader
finance and risk requirements such as revenue
recognition, pricing and discounting policies, export
controls etc.
CONTRACT MANAGEMENT
9. Support product management/marketing to ensure
company products and services are offered with
appropriate, competitive terms and conditions;
10. Monitor competitive terms. Monitor customer
satisfaction with terms and conditions and contracting
practices and recommend changes;
11. Monitor transaction compliance (milestones,
deliverables, invoicing, etc.);
12. Oversee Service Level Agreement compliance; and
13. Ensure contract close-out, extension or renewal.
CONTRACT ADMINISTRATION
CONTRACT ADMINISTRATION
Contract administration
— is the process that begins from when the
contract is awarded to when the work is
completed and accepted or the contract
terminated; payment has been made; and
disputes have been completely resolved. It is
primary part of the procurement process that
assures the project owner gets a quality product
for what it has bargained and assures that users
are satisfied with the final product.
CONTRACT ADMINISTRATION
• Contract administration concentrates on the
relationship between the department and the
supplier from contract award to contract closeout
ensuring the supplier delivers the product and/or
service in conformance with the purchase document
requirements.
• The specific nature and extent of contract
administration varies from contract to contract.
• It can range from the minimum acceptance of a
delivery and payment to the contractor to extensive
involvement by program, audit and procurement
officials throughout the contract term.
CONTRACT ADMINISTRATION
• Factors influencing the degree of contract
administration include the nature of the work, the
type of contract, and the experience and
commitment of the personnel involved.
• Contract administration starts with developing clear,
concise performance based statements of work to
the extent possible, and preparing a contract
administration plan that cost effectively measures
the contractor's performance and provides
documentation to pay accordingly.
CONTRACT ADMINISTRATION
For effective discharge of contract administration
duties, the procuring entity must focus on these four
(4) important elements:
1. Time
2. Cost
3. Quality
4. Documentation
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MONITORING OF CONTRACT ADMINISTRATION
Considerations for an efficient monitoring of contract
administration:
1. Develop a master schedule and a work
breakdown structure that incorporates every
important date or milestone in the contract;
2. List contract deliverables and their evaluation
criteria in detail, with checklists for the people
who perform the tasks;
3. Set a schedule and reminders for required
reports, including the format and delivery
method;
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MONITORING OF CONTRACT ADMINISTRATION
Considerations for an efficient monitoring of contract
administration: (Cont.)
4. For each party involved in the contract,
document change orders and contract
modifications that require rescheduling of any
deliverables;
5. Ensure that expenses charged to the contract
are allowable, allocable and reasonable; and
6. Give room for competing priorities.
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MONITORING OF CONTRACT ADMINISTRATION
General weaknesses of contract administration:
1. Allocation of more time to awarding contracts
rather than administering existing contracts;
2. Unclear roles and responsibilities of the Project
Manager (PM) and his/her team;
3. Excessive backlog in contract closeout and
incurred costs audits;
4. Improperly trained officials performing contract
oversight;
5. Unclear statements of work that hinder
contractor performance, and
6. Inadequate guidance on voucher processing
and contract closeout.
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MONITORING OF CONTRACT ADMINISTRATION
Suggested Processes to Address the General
Weaknesses of Contract Administration:
1. Begin with post award orientation – either by
conference, letter or some other form of
communication;
2. Establish good communication process –
helps both parties to achieve a clear and
mutual understanding of the contract
requirements; & the consultant to understand
the roles and responsibilities of the PM who
will administer the contract, and reduces
future problems;
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MONITORING OF CONTRACT ADMINISTRATION
Suggested Processes to Address the General
Weaknesses of Contract Administration: (Cont.)
3. Pre-project implementation meeting so that
there is a clear understanding of their
specific responsibilities and restrictions in
administering the contract;
4. Discuss authority of the project owner’s
personnel who will administer the contract,
quality control and testing, the specific
contract deliverable requirements, special
contract provisions, etc.;
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MONITORING OF CONTRACT ADMINISTRATION
Suggested Processes to Address the General
Weaknesses of Contract Administration: (Cont.)
5. Ensure there is an alternative dispute
resolution technique in place – known as
"partnering" to help avoid future contract
administration problems; and
6. To ensure that the end users are satisfied
with the product or service being obtained
under the contract, obtain input directly from
them through the use of customer
satisfaction surveys.
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T H A N K YO U!
CONTACT US AT:
Unit 2506 Raffles Corporate Center
F. Ortigas Road, Ortigas Center
Pasig City, Philippines 1605
TeleFax: (632)900-6741 to 44
Email address: [email protected]
Government Procurement Policy Board – Technical Support Office
