How project managers administer contracts – part 2

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.

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