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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