C/P Administration - Part A

What should I know about the C/P administration process?

Contract administration process

·      To start the contract administration process

·         Make sure that any properties of the acquirer

·         Are made available in good time

·         Such as licensed information, equipment, facilities or access

·         That are required by the contractor

·         To enable its work under the terms of the contract

·      This should be done

·         Using a suitable transmittal document

·         Containing a statement of original ownership

Work with the supplier

·      It is important to liaise with the supplier

·         Receive and review progress reports

·         And provide feedback or expedite as appropriate

·      As part of the documented record of the contract

·         Make sure there are

·         Progress reports, minutes of meetings and photographs

·         As applicable or appropriate

·         Also keep careful records

·         Of all commitments, payments, holdbacks and holdback releases

Progress payments

Normally, the supplier will submit regular progress invoices

·         Make sure the contents of each invoice is consistent

·         With the commercial terms of the contract

·         Including "holdback" retention, if applicable

·         Insist that the invoice displays

·         The total payments to date, and total contract value

·         Make adjustments for currency exchange rate conversions, customs duties, etc

·         If applicable

·         And obtain the approval of the project's director

Approved invoice

·      The previous steps

·         Result in an approved invoice

·         Transmit it to accounts payable department

·         And instruct them to make payment !

·      No doubt according to some regular routine

·         They will "cut" a check and send it to the supplier

·      It is worth testing from time to time

·         That the money has in fact safely arrived

·      Nothing holds up work better

·         Than a lack of funding

Contract changes

It is essential to keep track of changes

·         So, document any changes to contract

·         Based on information supplied by the project director/manager

·         Get a written description of the change

·         And obtain the supplier's quotation

·         For the work involved in the change

·         Including any impact on associated work

·         And the effect on the contract schedule

·         Changes may also be initiated by the supplier

·         So, adopt the same procedure

Quotations for changes

·      As soon as a quotation is received for a change

·         Verify that it is consistent with the terms of the contract regarding changes

·         Obtain the project director's validation/confirmation

·         And issue a change order to the supplier

·         With copies to others who need to know

·      The result is a

·         Formal contract change order

Is the contractor's price reasonable?

·      Be aware that in an on-going contract

·         Changes affect productivity

·         So that there may be a cost associated with other work

·         Attributable to the change

·         The contractor must be compensated accordingly

·         For this impact

·      In some cases

·         The impact may not be felt, recognized, observe or quantifiable

·         Until well after the change has been carried out !

Impacts of changes

Factors affecting how much

·         The size of the change

·         How much lead time there is

·         To process the change documentation

·         And to organize for it after approval

·         How much work has to be redone

·         Or at least examined for potential impact

·         Including any necessary re-planning

·         The frequency of multiple changes

·         That collectively lead to disruption

·         And a lowering of morale generally

·         As well as lost productivity

Legal ramifications

Unfortunately, in project work

·         The legal and bureaucratic need

·         For formal approval

·         Before the work of the change begins

·         Is simply not consistent

·         With the practical project need

·         To get the work done promptly

·         And to do efficiently !

Contract/Procurement Administration & Closure see next page