Administering Contracts for the Purchase of Goods and Services

General

Contract administration is the management of a contract after the contract has been signed by all parties, and work begins.

Administration of a contract may be simply receiving, inspecting and accepting goods and paying the invoice. Or it may be management over a multi-million dollar project, from beginning to end. Contract administration may be done by one person or by a team.

• Become familiar with a statement of work (SOW). The SOW spells out in detail all the tasks and milestones that must be reached. It will also contain specific, detailed responsibilities for both the contractor and the University department. Although the contract itself may explain a payment plan, further detail or explanation of this may be included in the SOW section.
• Become familiar with the contract terms and conditions. Read and analyze it. Contact the Purchasing buyer whose signature appears on the contract if you have any questions about any of the contract Terms and Conditions. The contract not only tells you what is required of the vendor, it also spells out the responsibilities of the University. If the University does not meet its responsibilities under the contract, chances are the contractor (vendor) will not be able to meet its obligations either.
• Develop a contract administration plan based on the complexity of the contract. Each task or action expected to be accomplished by the contractor and for the University department should be listed along with timelines and milestones. Include a communication plan, a responsibility matrix (both University and contractor responsibilities), a work breakdown structure and a schedule of key tasks.
• Create a checklist of all aspects of the contract that will need to be monitored, based on the contract itself and the SOW. Maintain this checklist throughout the contracting term. Some examples of items to include in this checklist are:
  • Overall contract dates (start and end dates)
  • Milestones with due dates
  • Delivery dates for equipment
  • Installations, implementations, training details
  • All costs
  • Invoice due dates
  • Payment due dates
  • All contractor responsi1bilities/promises/deliverables listed in contract or SOW
  • All University responsibilities/promises/deliverables listed in contract or SOW
• Conduct internal and external pre-performance conferences. Internal conferences are held to familiarize the project team with the contract, the SOW, and the contract administration plan. External conferences will bring together the internal team and the contractor's team to ensure that everyone understands the responsibilities, the contract, the SOW, and general expectations as well as contractual prohibitions for both parties. Minutes of these meetings should be sent to all participants with an invitation to make additions or corrections.
• Administer all the following tasks as the project progresses:
  • Document contract changes. Any changes to the contract itself must be executed by a formal Amendment. Discuss this with your buyer in Purchasing.
  • Monitor and document progress. Conduct regular progress reviews with the vendor. Include the contract administration team.
  • Identify problems, discuss solutions with contractor, and work to resolve the problems with the contractor.
  • Accept or reject services performed.
  • Review checklist to ensure that all issues of performance are being or have been completed.
  • Review and accept or reject invoices. Pay according to the payment schedule.
  • Document lessons learned for the next round of contract administration.