Monitoring and understanding weakness
In the first part of this series discussing contract administration, we discussed the purpose, focus, and influencers of contract administration. In this part, we’ll move on to look a little more closely at how contracts are monitored through the process of contract administration.
Step 1: The master schedule
In this first step, the project manager will develop a master schedule and a work breakdown structure to incorporate every milestone throughout the lifetime of the contract.
Step 2: Determine deliverables
The deliverables must be clearly defined, and this includes the criteria by which they will be monitored. Checklists for those involved in the project are a good way of keeping a contract on track.
Step 3: Set schedules for reporting
Set up a schedule for reporting, and put in place a system to remind what reports are required and when. Pay attention to how these reports should be formatted and delivered, to ensure they are appropriate. See more in our blog discussing why communications planning is essential to project planning.
Step 4: Control change orders
Ensure that all changes are documented in a standard format and that relevant people are notified in good time.
Step 5: Monitor expenses
Allocate expenses accordingly, ensuring that they are both allowable and reasonable under the contract terms.
It is also best practice to allow some ‘wiggle room’ – time and space for competing priorities.
Factors that weaken contact administration
The project manager should always bear in mind the factors that could weaken contract administration, which include:
- Time allocated to awarding rather than administering contracts
- Blurred lines of responsibility or poorly defined roles
- Backlog of contract closings
- Poorly trained people performing contract oversight
- Unclear contract clauses that hamper progress
Next time, we’ll finish this series about contract administration by looking at some best practices and a suggested administration process.