Procurement Post: August 2020

Contract Management

When entering a contract with a supplier, it is important to keep in mind that once the contract is executed, your department’s work doesn’t necessarily stop. It is necessary to monitor the contract through its whole life-cycle, from development to inception to termination.

Effective contract management involves planning and monitoring the contract at all stages, including the contract terms, scope of work, supplier performance, and execution of deliverables. The goal is to maximize supplier performance and minimize risk to both parties.

The department initiating the contract is responsible for managing the contract, from developing the scope of work in collaboration with the supplier, to monitoring the supplier’s performance, to enforcing the supplier’s compliance with the terms and conditions. To ensure that you are effectively monitoring the contract, here are some items to consider.

Scope of Work:

  • Is there an established point of contact and responsible party for both my department and the supplier?
  • Are both parties’ roles clearly defined?
  • Are the deliverables clearly defined?
  • Has my department developed a clear and reasonable timeline for deliverables?
  • Is the pricing reasonable and within my department’s budget?

Supplier Performance and Compliance:

  • Is the supplier following the project timeline?
  • Are the deliverables being met?
  • Is the supplier remaining compliant with the terms and conditions?

Department Responsibilities and Compliance:

  • Is my department remaining compliant with the terms and conditions?
  • Is my department communicating with the supplier about any issues that arise?
  • Is my department documenting the contract’s progress, including any issues that arise?
  • Is my department adhering to the payment due dates?
  • Is my department paying the supplier only for services satisfactorily rendered per the terms and conditions?
  • Is my department ensuring that a contract renewal is in place prior to receiving or paying for services that are outside the scope of the initial contract?

If you have issues with a supplier’s performance or compliance with the contract terms that you are unable to resolve with the supplier, reach out to Procurement Services for assistance.