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Contract Administration: Tools, Techniques, and Best Practices

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Contract Administration 2009 Tools Techniques Best Practices

Will usually ship within 1 business day of receiving cleared payment - opens in a new window or tab. Monitoring contract performance is a key function in the contract administration process to make sure that all involved parties are performing their duties in accordance with the contract. Requiring contractual usage reports is a practice used by many states. However, the content and compliance of contractor responses can vary. Gathering feedback from user agencies about the service received and contractor performance, typically through surveys, telephone or face-to-face inquiry are some of the tools used by central procurement offices.

Documenting and maintaining a contract file are good practices to ensure the delivery is in line with the contract requirements and issues are addressed timely. All contract performance issues should be properly documented and included in the official contract file. The Contract File should contain the essential record of contract award and performance as follows:.

Documenting contract compliance and performance issues when the contractor is not able to perform as agreed upon and addressing them timely is an important activity in the administration process. Regular communications with the contractor should identify problems timely. Dispute resolution processes need to be in place to resolve problems and reach agreement rather than seeking legal remedies.

Managing documentation is especially important in cases of disputes, assessment of liquidated or actual damages, and for justifying termination for default. Contract changes are inevitable.

Anticipated amendments such as contract prices, time of performance, extension and renewals, or other terms deemed appropriate should be built in the contract provisions. Contract amendments are typically approved by the procurement office, especially for centralized statewide contracts.

Involvement of legal counsel may be requested depending on contract complexity and the type of contract modification to the standard terms and conditions. The importance of having a change management process in place cannot be overstated.


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A good practice for handling unforeseen amendments effectively should follow these principles:. A good practice for state central procurement offices is to provide written guidance to agencies on contract disputes and escalation procedures. The process for managing issues arising in contracts and how claims and disputes are addressed should be set in the contract terms and conditions.

Poor or non-performance should never be accepted. That is why documenting problems is critical when requesting a cure. Acceptable means to resolve disputes should be identified in the contract.

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They may include:. Alternatives to termination for default that can be considered include: withholding payment until performance requirements are met, seeking an alternative source of supply, revising the contract or delivery schedule, or re-procuring the product or service. Managing the closeout of the contract is the final phase in contract administration.

Documenting the life of the contract, including the history of the contract from the planning stage to contract completion, consistently reviewing contractor performance, and promptly evaluating challenges and successes are recommended steps. The contract is considered successful when all obligations have been met, including the completion of all legal, administrative, and managerial tasks. Challenges Statutes, procurement rules, or regulations tend to provide insufficient guidance to procurement officials relating to the role and duties regarding contract administration.

Useful Tips and Solutions Provide clear guidance for developing, awarding and monitoring contracts; Provide training to procurement staff involved in contract management, including contract administration and monitoring activities; Communicate as early as possible and conduct pre-performance conferences or kick-off meetings; Emphasize the importance of having kick-off meetings to discuss requirements, performance; metrics, etc.

We would like to thank all states that participated in the group interview and offered their state experiences and perspectives on this topic. Disclaimer NASPO makes no endorsement, express or implied, of any products, services, or websites contained herein, nor is NASPO responsible for the content or the activities of any linked websites.

Any questions should be directed to the administrators of the specific sites to which this publication provides links. All critical information should be independently verified. Resources Hartley, Janet M. ISM Professional Series.

Contract Administration : Gregory A Garrett :

Foundation of Supply Management 2nd ed. Introduction to Public Procurement. National Institute of Governmental Purchasing. Rumbaugh, Margaret G. Contract Management Body of Knowledge 4th ed.