Contract Administration

Stacy SassmanPurchasing AgentIowa State University

Cory HarmsAssociate Director of Purchasing Iowa State University

Contract AdministrationSession Outline

• What is a Contract Administration Plan• Why have a Contract Administration Plan• Writing A Contract Administration Plan

– Purpose and Scope– Contacts and Responsibilities– Meetings– Vendor Requirements– Monitoring Performance– Dispute Resolution– Changes to the Contract– Closing the Contract

• Helpful Tips for a CAP• Common Issues• Questions

Contract Administration• What is a Contract Administration Plan (CAP)– A loose set of guidelines– Flexible – allow the plan to fit the contract– Plan should be included in the contract– Plan should be agreed upon by Vendor– Plan should increase communication

• What is a Performance Assessment Plan (PAP)– Monitor the performance of the contract– Created to administer the CAP

Contract Administration• When do you need a plan?– When the nature of the contract creates a need for

oversight• High Value Contracts• High Visibility Contracts• High Risk Potential in Contract• Customer Sensitive Contracts• Complex Contracts

– Term of the contract creates a need for review– Past experience creates need

What is the Value of a Contract Administration Plan?

• Encourages open communication– Set a timeline for communication– Provide feedback – Maintain the relationship– Head off issues before they arise

• Provides a clear understanding of roles and responsibilities

• Identifies and minimizes the potential risks and problems

Writing a CAPPurpose and Scope

• Describe the purpose of the contract administration plan and the contract (Requirements)

• State what you want from the contract:– Product/service delivered on-time– Quality product/service– Receive correct quantity– Accurate billing

Writing a CAPContract Contacts and Responsibilities

• Describe the roles and the responsibilities of each person involved.– Purchasing Agent/contract manager– Department contact (for operational issues only)– Vendor contact

Writing a CAPMeetings

• Kick-off meeting– Introduce contacts– Discuss scope of work in detail– Discuss contractual obligations of all parties

(Requirements)– Establish communication protocols (email, phone, etc)

• Additional meetings – quarterly, milestones, annually, etc.

Writing a CAPVendor Requirements

• Requirements may be needed:– Before work can begin– After work has started/during the life of the contract– Upon Completion of the Contract– Months or years after the Work is completed

Requirements• Before the work can begin– Certificates of insurance– Employee background checks– Surety/Payment bonds– Parking permits– Access cards or building keys– Equipment checks– Contractor registration number– Certifications/Licenses

Requirements

• After the work has started– Milestone/progress meetings– Tests– Quarterly/Annual reports– Acceptance tests– Price audits– Payments – Surveys

Requirements• Completion of the Work– Testing/Tests– Final reports– Payments – Completed work (design, drawings, equipment, rights)– University Data– Escrow Rights

Requirements• Post Completion

–Completed Operations Endorsement–Protection of Records (University or Student)–Audit of Vendor Records

Monitoring Performance • Period of performance/delivery dates• Inspection and acceptance• Milestones• Potential issues:– Wrong or unsatisfactory product delivered– Poor performance– Delays– Subcontractors– Property damage

Writing a CAP Dispute Resolution

• Describe how disputes will be resolved• Who to contact• Actions to be taken if dispute is not resolved• Penalty clauses• Corrected work by another party

Writing a CAPContract Changes

• Changes to:– Contract period of performance– Dollar amount of contract– Scope of work– Terms and conditions changes– Assignment

Writing a CAPClosing the Contract

• Final deliverables• Property• Payments & invoices• Evaluation

Helpful Tips

• Create a template for meeting notes• Track meetings and issues on a spreadsheet• Use the task function in Outlook• Documentation• Sample Plan

Common Issues

• Poor communication• Level of involvement• Vendor not a good fit• Expectations of Dept. and Vendor not met

Summary• What is a Contract Administration Plan?• Why have a Contract Administration Plan?• Writing A Contract Administration Plan

Purpose and Scope Contacts and Responsibilities Meetings Vendor Requirements Monitoring Performance Dispute Resolution Changes to the Contract Closing the Contract

• Helpful Tips for a CAP• Common Issues

Questions