DGS/DPS

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Tips for Contract Management/Administration
Gary Johnson Contract Compliance Officer Division
of Purchases Supply
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Workshop Objective

• Understand the need for Contract Administration
  Management.
• Explore Contract Administration Techniques.

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THE NEED FOR CONTRACT MANAGEMENT

• ? TO ENSURE THAT THE USER/AGENCY ACQUIRES
  GOODS/SERVICES ON A TIMELY BASIS TO MEET ITS CORE
  MISSION. INCLUDES BUT NOT LIMITED TO
• IDENTIFYING FUTURE REQUIREMENTS
• FAMILIARIZING YOURSELF WITH INDUSTRIES
• MANAGING CONTRACTS LISTING
• ORGANIZING A CONTRACT ADMINISTRATION PROGRAM.

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THE NEED FOR CONTRACT ADMINISTRATION
? TO ENSURE THAT THE USER/AGENCY COMPLIES WITH
ITS OBLIGATIONS UNDER THE USER/VENDOR
AGREEMENT. ? TO ENSURE THAT THE CONTRACTOR
COMPLIES WITH ITS OBLIGATIONS UNDER THE
AGREEMENT. ? TO PROVIDE A WRITTEN RECORD OF
USER AND VENDOR PERFORMANCE FOR PURPOSES OF
ASSESSING COMPLIANCE, ENFORCING RIGHTS, AND
MAKING FUTURE PROCUREMENT DECISIONS.
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The Why of Contract Administration

• 1. AWARDING THE CONTRACT IS NOT THE END OF THE
  JOB.
• a. You need to be more than lucky
• b. Performance tends to rise to expectations
• c. Yogi was right! "It ain't over till its over"
• 2. PERFORMANCE VERIFICATION IS INCUMBENT UPON
  THE ASKER
• a. You are the one authorizing pay
• b. Vendor always works at or below minimum
  standards
• c. Perseverance the answer "When the cat's
  away, the mice will play."

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ADMINISTRATION CONT

• 3. THE ROLE OF COMPLETE WORK
  STATEMENT/SPECIFICATIONS
• a. The contract contains the total agreement
  (plus)
• b. It has to be understandable to be agreeable
• c. We understand only what is easily explainable
• d. You can describe anything! (see A-1)
• 4. NON-COMPLIANCE BY VENDOR AGAINST THE LAW . .
  . NOT REQUIRING COMPLIANCE IS ALSO AGAINST THE
  LAW
• a. Malfeasance - Conduct illegal to official
  obligations
• b. Misfeasance - Doing something that's right the
  wrong way
• c. Nonfeasance - Failure to perform
• d. State's rights - Can't give away what's not
  yours

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GOODS CONTRACTS

• Order Following (Old Fashioned Expediting)
• High Dollars
• Award Based on Delivery
• Indication of Vendor Problems (Bad
  Relationship)
• Need Close Agency/Vendor Coordination
• Production Materials
• Liquidated Damages Clause
• Technical/Complex Procurement

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Goods Contracts

• Vendor Contacts You Concerning Order
• Item at Variance with Expectations
• Product Not as Specified
• Difference In Order Quantity
• Invoice Differs from Purchase Order
• Prepare Receiving Report

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Service Contracts

• Best Done By Using Contract Driven Checklist
• For Consulting, Training, etc Use Mile Stones
• Checklist Should Be Qualitative, Quantitative,
  and Comprehensive
• Checklist Should Allow for Monetary Assessments
• Can Be Developed By Either Party
• Should Serve As A Basis For Payment

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Criteria for Increased Administration(Federal)

• Nature Extent of Preaward Survey
• Value Complexity of Contract
• Urgency of Delivery Schedule
• Extent of Subcontracting
• Vendor Performance History
• Complexity of Payment Arrangements (Progress
  Payments, etc.)

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Federal Methods

• Detailed Administration Delegation Document
• If Vendor Is Purchasing Items For Commonwealth,
  Consider Monitoring Vendors Purchasing System
• Monitor Cost Overruns/Underruns of Estimates
• Periodic Plant Inspections
• Monitor Financial Solvency
• Use Of Auditor
• Monitor Contract With View Towards Closeout

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Remember

• You Are Only as Good as your
• Specifications/Work Statement ,Helping to Make a
  Responsive/Responsible Award and Then Minding the
  Business Using Clear Cut Procedures Allowing
  Immediate Action-Taking By Using All Available
  Resources.