Step 5 - CONTRACT MANAGEMENT

The contract has been awarded.

The contract must be managed on an ongoing basis, to ensure the asset is delivered in compliance with the contract and that the government meets its contract obligations (for example to make payments or provide information or materials). A formal governance structure within the contract documents provides the framework for communicating with the service provider and resolving any issues.

Formal meetings should be conducted on a periodic basis with a focus on agreed KPI’s to assess the performance of both parties based on the terms in the contract. Variances to the contract and other attendant issues must also be effectively managed and resolved.

Manage contract

A contract manager is required to manage the contract, once awarded. This involves ensuring compliance by the contractor and that the government’s (Principal’s) obligations are met, including making payments and carrying out other required actions in accordance with the contract.

A governance framework and contract management plan, including performance measures consistent with the RFT documents, is developed and confirmed with the supplier. This ensures both parties have a common and clear understanding of their responsibilities and obligations.

The performance of the contract is monitored on an ongoing basis and reported to relevant personnel as required by the governance framework.

Actions and decisions need to be justified and recorded for auditing and accountability purposes.

Where there is any non-compliance, an action plan is developed and agreed by both parties, and its implementation is monitored.

When a contract variation is raised by either party, its impact on the current agreement is reviewed and other options are considered. A report highlighting the costs and benefits is prepared for approval. Once it is approved, details are provided to affected parties.

Any material variation to contract information that has already been publicly disclosed will also need to be disclosed.

Material Variation Reports are required to be submitted to Treasury for all high risk projects or those valued at more than $50m.

A Gateway Pre-Commissioning Review may be held to assess the state of readiness to commission the project and implement the change management required.