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Training & Development Contract Management. Contents Introduction to Contract Management Definition Contract Management Issues Activities Overview Contract.

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Presentation on theme: "Training & Development Contract Management. Contents Introduction to Contract Management Definition Contract Management Issues Activities Overview Contract."— Presentation transcript:

1 Training & Development Contract Management

2 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

3 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

4 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

5 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

6 Contract Manager: Importance of the role Obtain value for money Ensure contractual obligations met Improve communication Control risks

7 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

8 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

9 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

10 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

11 Contract Manager Authority Contract Manager needs a level of authority to ensure project runs smoothly Limited delegation to approve variations that involve extra cost.

12 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

13 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

14 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

15 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

16 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)

17 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

18 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

19 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

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

21 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

22 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

23 Contract Management: Key Tasks Receipt and Acceptance of Variables Payment Dispute Resolution Complaints Procedure Discharge of Contract

24 Contract Management: Key Tasks (Cont) Liquidated Damages Performance Evaluation and Debriefing Product Warranties Contract Completion Record Maintenance & Reporting

25 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.

26 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)www.archives.sa.gov.au

27 Reporting Regular/ad-hoc reporting on various aspects of departmental contracts, including: Supplier information Contract value Usage Savings Performance Improvement opportunities

28 Reporting (Cont) Contract Closure Report For acquisitions deemed high risk and falling in Quadrant 2 or 4 of the State Procurement Boards Acquisition Planning Guidelines Report should be prepared at completion of the contract and forwarded to Procurement Unit

29 DECS Procurement Policies & Guidelines Refer to Contract Management Guidelines In.decs (Procurement web pages) SSONet (Procurement web pages) Or contact Procurement Unit on


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