A contract is a written agreement that is subject to the law between the customer and the supplier, contractor or provider of goods, construction and services. Administration of the agreement (contract)
Contract administration involves all activities related to monitoring the performance of suppliers, contractors and service providers in the performance of their contractual obligations, as well as ensuring appropriate action to promptly address deficiencies identified in the performance of the contract, scope or conditions.
Where does it start?
Preparation for the administration of the contract begins with the planning to begin in the bidding and selection process. This includes the appointment of contract administrators, a periodic performance review strategy, a time frame for confirmation of contract performance and acceptance of contract results to avoid delays in payment and to understand contract terms to ensure effective oversight.
Although planning itself begins in the selection process, the administration of the contract actually begins at the time of signature of the contract is the paragraph where the parties to the contract are bound by its terms and conditions.
Who is responsible?
The customer usually appoints employees or, preferably, a team of qualified individuals to take responsibility for managing the contract. Responsible Contract Administrator shall perform the obligations and obligations of the customer specified in the contract and ensure that suppliers, contractors and service providers perform the contract in accordance with its terms. However, the supplier, contractor or service provider has the primary responsibility for ensuring that the goods, works or services meet the required standards and advise on the need for any changes due to restrictions arising during the performance of the contract.
The administration of a contract is normally concluded with the final review and acceptance of the goods, construction or services prior to the date of completion or termination of the contract. Inspection and verification before acceptance must at least ensure:
How important is that?
The stage of performance of the contract is very important, as it is where the results of the procurement process are obtained, and the individual can ultimately derive the expected benefits from his or her procurement request. Without the conclusion of the contract and the effective execution of the contract, the purpose of initiating the procurement process cannot be achieved. The supplier, contractor or service provider shall be responsible for the performance of the contract in accordance with its terms and conditions in order to meet all technical and quality standards. The customer is also responsible for compliance with the terms of the contract; especially the obligation to secure payment is fulfilled on time.
Does It Get The Attention It Deserves?
Contract administration involves risk management. Its main purpose is to monitor performance to ensure that the objectives of the contract are met in a timely manner and within the planned budget, and to identify any deficiencies and to find corrections (including termination or breaking the contract) before it is too late.
Good contract administration is crucial to the success of the public contract process, as it is at this stage that a significant amount of waste and misuse of public funds and corruption in public contracts occur. The focus is on the procurement process, which is a relatively shorter period than contract performance. However, the real benefits are obtained after the conclusion of the contract, so you need to pay more attention to ensuring the implementation of the contract in accordance with its terms. This does not reduce the importance of the procurement process to obtain the contract, but the real value of the entire procurement process is realized only after the conclusion of the contract.
- Received the correct amount
- Goods, works or services meet the technical standards specified in the contract
- Any changes to the contract are well recorded and taken into account
- Goods, works or services were delivered or completed on time
- The delay was noted and action taken as specified in the contract and all necessary benefits or documentation were received.