Transcription of Contract Management Guide - CIPS
1 ContractManagementGuideContractManagemen tGuide2 Intr oductionandscope3De fin ition3 Importance of co ntra ct manag eme nt3 Acti vities4Up stre amor pre -award activities4 Downs tr eamor postaward activities26 Ack nowledgements36 Bibliograp hy36 Introdu ct ion and sco peThisgu ideis in ten de d to cover all th oseactivities associatedwi th contra ctma nagementfromth e establishment ofthebu sinesscasean d th e confirmationof need , th roughcontr actadministrati onandre lationshipmanag ement to therev ie w of Contract pe rfo eactivities themselves are dividedin to twodis tin ct butinterdep en de nt phases,ups tr eaman d do wn str eamof theawardof gu id e is generic in tha t its pr in ciplesare int en de d to be applicable to allcontrac ts froma simple or de r, th rou ghfra meworkcontractsto co mplexconstru cti onor servicecontr acts.
2 And itshould be seenas equ all y ap plicabl e tocontrac ts in theprivate as well as th epub lic se fin itionContractlifecycle manag ement is theprocess of sy stematicall y an d ef ficientlyma naging Contract cr eat ion , ex ecutionandanalysi s formaximisingoperationa landfinancialperformanc e andminimisingrisk .1 The re ar e a numberof othe r de finitionsof Contract manage ment, th e major ity ofwhichreferto post-award ce ssf ul contrac t ma na ge ment,howeve r, is mosteffe ctiveif upstreamorpre -awardactivitiesare pr operly carr ie dou por tan ce of contra ct ma na geme ntOrga nisa tio ns in bo th th e publ ic andpr iva te sec torsar e facingincreasingpr ess ure to re duce costsandimprov efin ancialandop er toryrequirements,glo ba lis ation.
3 In cre asesin co ntr ac tvol umesan d complex ity hav e resultedinan in cr ea si ng recognition of th eimportan ce and benefitsof effectiveco ntra ct ma e gr owing recognitionof th e needtoautomateand improv e co ntr actu alpr oces ses an d satisfyinc rea singco mpl ia nceandanalytical needs has alsoled to an inc reasein th e ado ptionofmo re formalan d str uctu re d contrac tma na gement pr ocedures andan increasein th e avail ab ilityof sof twareapplications designedto add re ss th esenee ds .It is wor th wh ile notingth at contractma na gement is su ccessful if: th e ar ran gementsforser vicede liv eryco ntin ue to be sa tisfactory to bothpa rti es, an d theex pectedbu sinessbe nefi ts an d value formoneyarebe in g real ised th e expectedbu sinessbenefitsandva lue for money arebeingach ie ved th e su pp lie r is co -o pe ra tiveandres po nsiv e th e organisa tionund erstands itsobligations underth e contrac t th er e areno disputes th er e areno su rp rises a pr of essional andobj ec tivedeb ateov er cha nges and issues arisingcanbehad effic ie nciesarebeingrea (A be rde en Gr ou p)2(A be rde en Gr ou p)
4 Act ivit iesThe foundationsforeffectivean dsu cc ess fulpost-awardcontractma na ge mentrelyuponcar eful,comprehe nsivean d thoroughimplementationof theup streamor pre-awa rd ages, theemphasisshouldbe fo cusedonwhy the contrac t is bei ng establis hedandonwh etherthesupplierwil l be ableto deli ve r in service andtechnica l ter , car efulconsiderationmustbegi vento ho w thecontractwillwork onceit ha s be en ganisation shigh-level requirements shouldbeca ref ul ly researchedso thatthere iscl arityof purposefr omtheoutset. Thiswi ll he lp to ensureclarity in all aspectsof theprocurementpr ge mentof contracts,particula rlypar tnershi ps,requiresflexibility onbo thsi de s anda wi llingnessto adaptth etermsof th e contractto reflectch an gingci rcu mstance s.
5 It is important torec ognise thatpr oblemsar e bound toarisewhich couldnotbe for eseen wh enthe Contract lly,it maynot be necessaryto fo lloweve ry acti vityforeverycontract-par tic ul arl y in th e caseof small, simpleorders - butit is advisableto rea d th ewholegui de andto ap plythe advicepro vi de d undereach stageasappropriate to theparticul ar con tr actualci rcu ea m or pre-awa rd activ it ie sa)Pre pa ring th ebus inesscas ean dse cur ing man agem en tapprov alAll con tr ac ts are predicated on the needto obt ai n man agement com mi tme nt andapp rovalat th e appropri at e level. Thisinvolv es the for mulation of a soundbus iness ca se ali gned to the organis at io n scorpora te andfunctional st rat e busi nes s cas e se ts out the pol ic y,bus iness an d co ntrac t object ive s an d theissu es tha t aff ectthe de ci sio n and theinves tment.
6 It should se ek to esta bli shtha t the pr oposed contra ct wi ll me et theneed,thatit is achiev abl e and affo rda bl e,and it sh ouldaddress the fo ll owingissu es : th e ou tcome(s)of thecontrac t critical success fa ctors th e po ssible alte rnative s, includ ingexis tin g contr ac ts th e ris ks in clu dingtheextentandwhe re th ey ma y fal l id en tificationof any contingentneedsand ramifications of pr oceeding ti mescal busin esscasesh ou ld be preparedwiththein vol ve mentof thesta ke ho ld er s, in cl udi ng wh er e andifpos sibl e, the en d user sho ul d be sig ne d offby th e sponsororpatr on.
7 The busin esscaseis a workingdocument andshoul d formthebasisofth e post- implementa tio n reviewandused as a manag ement toolto ensureth at theor ig ina l outcomesandbenefitshav e be en ac hie (OG C Cont ractMana gement)If thepr ojectis lar ge,co mplex andinpar ticular,innovativ e in natur e, thema rke t shouldbe approachedconcu rre nt ly withth e pre paration of thebu sin es s case,fi rstl y to al er t th emto thepote ntialneedan d second ly to ta kesou nd in gs onsuchissues as fea sibility,ca pacity, capab ility,appro achandlev elof in te re ) As se mb ling the proj ect teamThe nee d to assemblea teamto ma nagea contractualpro cur ement pr og ra mmewill be determinednot on ly by thesc ale ,natu re, complexityand significanc e ofthepr ocurementand th e necessaryskillsandexperiencebu t alsoby th e ex tenttowhic h it is consider ed ap pr opria te,be nefi cialor a req uir ement to complywithorganisational po licyto in vo lv esta ke holdersin th e pro je ctorsto be considered wh enassemblingthetea m ar e.
8 Thenatureof th e pr oje ct thenatureof th e wo rk en vir on mentand themanag ement st yl e of thetea m communication intern al ly andexte addi tionto procure ment, th e pr oj ectte am maybe drawnfro m an y an d al ldis cip lin es wi thinth e organ isation asapp ropri at e andre le vant. Th e fo ll owingare examples;design, re search anddevel opment,pro duction, qual ity co ntr ol,logistic s, marketing an d sa le s, le ga l,fin anceandhumanreso ur ce s. Theproject teammayal so advanta ge ou slyin clu de rep resentativesof theen d us er s,whe the r internalor external, an drep re sentativesof disciplin es withinsup pli er orga nisationssu ch as design,pr oduc tion, pro ductionplannersandlog is ly, th esein divi du alsandgroups wil lnot ne ed to me et all th e ti mebut,depend in g onth e size andco mplexityofth e project,th erema y we ll be a cor egro upth at me etsregula rlyandth is willbe th e proj ec t tea m.
9 Otherswillth en beca ll ed on as and when req uir ed .In add itionto theneedto ide ntifythenecessary te ch nic al skills,knowledg eandex perien ce withth e ap pr opriatelev el of au th orityrequiredof th eme mbersof th e team,th e importanceofth e abil ity of te amme mbers to wo rkto ge the r ef fe ctiv el y andthesig nifica nceof th e rol e of theproj ec t leader sh ou ldbe rec es e as pectsare bey ondth e scope ofth is gu ide,but it is co nsi dered advisabl eto de vo te timeto stu dyingth e manybo ok s availabl e onth e topicsofmo tivation , leader ship, po wer, influenceandgr ou p workin g, pa rticularl y if thesiz e.
10 Tim escalean d complex ity of th epr ocur ement pro je ct ) Dev elopi ng co nt ra ct st ra te gyTh e stra tegyrel atingto a par ticularco ntra ct sh ou ld accord withtheorga ni sation s overal l pr ocurementstr ate gy .Th e de velopment of a contrac t str ategy isdes ig ned to establishth e formof thepr ocur ement andpr ovide assi sta nceindeterminin g th e formulationandawardof th e contr actan d th e styleandtyp e of54(OG C Co ntractMan age ment)5(Fo r exa mp lese e Ha ndyUnde rst and ingOrganis ati ons )ma na ge mentto be adoptedforthesu bs eq uent service delivery,rel ations hipma na ge mentand contractadministr at ion.
