This document provides an overview of key aspects of contract management. It defines contract management as ensuring all parties understand their responsibilities and obligations under a contract to allow efficient performance. It describes the important role of the contract manager in obtaining value, ensuring obligations are met, improving communication and controlling risks. The document outlines the contract manager's responsibilities, required skills, and tasks like implementing plans, monitoring performance, handling variations, and maintaining records. It emphasizes the importance of risk management, occupational health and safety, and complying with relevant policies.

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/)

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)

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 Board’s
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 8226 1610