Contract administration best practices and process
In the first two parts of this series we laid the foundations of contract administration in the project management context by exploring:
In this last part of three about contract administration, I want to look at some of the best practices employed by project managers before suggesting a process to administer contracts.
Best practices in contract administration
The project manager should:
- ensure that they receives appropriate training on their duties with regards to the project and all of its contracts;
- take steps to build and maintain a good relationship with the project owner;
- seek and get clarification on their role, and all associated responsibilities;
- undertake the observation and monitoring of contracts;
- be appropriately incentivised.
In addition to these, the project manager should provide suitable guidance to other project stakeholders and contractors. This includes:
- explanation of roles and responsibilities with regard to procurement and project finance, and approval of contractor invoices;
- the need to remain consistent for cost reimbursement contracts;
- assessment of reasonable costs; and
- having effective policies and procedures with regard to contract administration, including documentation, record keeping, and tracking of invoicing.
By making sure that working relationships have been good throughout the lifetime of the contract, disputes will be avoided or managed amicably.
The project manager will also need to pay specific attention to contract closing and ensure that all activities and stakeholders are coordinated throughout. This will enable the outcomes of contracts to be met, and for any lessons learned to inform future projects and contracts.
A six step process of contract administration
- After contracts have been awarded, establish appropriate communication processes, and ensure that there is a clear understanding of the requirements under the contract
- Ensure that the contractor understands the roles and responsibilities of the project manager, and the authority under which he or she is working
- Meet with contractors to explain their specific responsibilities in the administration of contracts
- Set metrics for measuring quality and deliverables
- Ensure that there is a dispute process in place, and that all parties understand the process
- Keep the customer onboard and informed throughout, encouraging feedback
If you’re having problems with contracts, the parties associated with them, or expected outcomes not being met consistently, feel free to contact us here at Your Project Manager – we’ll be happy to discuss a bespoke contract administration strategy that will ensure the success of your project.