2.8.3 What will be the contract monitoring process?

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Contract management is the active monitoring and control of all aspects of the relationship between the supplier and the contracting authority and the monitoring and control procedures for any contract should be considered at the specification stage.  The activities can be divided into three areas: service delivery management, relationship management and contract administration. It is the responsibility of the contract manager to ensure that all three areas are being implemented according to the requirements of the contracting authority.

Although the activities that need to be considered under each category will vary depending on the nature of the contract and the goods, services, and works being provided, there are standard practices which can be included. The following outlines a number of monitoring requirements that contracting authorities should consider at the pre-tendering stage.


Table 2-30: Key contract monitoring requirements at the pre-tendering stage


Example Options

Monitoring the suppliers performance against the specific targets set out in the specification.

Through the use of a phased approach and therefore reviewing progress at the end of regular phases against the original targets

The way in which completed work will be inspected and accepted.

Through site visits for construction projects or presentation of interim reports for consultancy projects. Acceptance can be through a signed inspection report or agreement to pay an interim payment.

How complaints will be received and recorded from customers particularly where the service may be delivered to the public on behalf of the contracting authority.

Provide a specific point of contact within the contract management team to deal with customer complaints.

How customer satisfaction with the service will be recorded

For example, the use of questionnaire evaluation forms at the end of staff training courses.

Obtaining information from the supplier on their opinion of their progress.

Through the use of regular progress reports or site meetings

Agreeing any revisions in timescale, quantity/quality of outputs from the supplier

Through monthly progress review meetings.

The management of any contract requires significant resources depending on the size and complexity of the contract. Large contracts usually require 2% of the contract value for the management aspect. This proportion increases for smaller contracts.

In order to keep control of a contract it is important to identify key progress review points during the implementation of the contract that allow for structured and regular communication between the contracting authority and the supplier. The number and extent of these review points will be determined by the complexity and length of the contract. However the key control issues that contracting authorities need to consider and plan for at the pre-tendering stage include:

Any unsatisfactory performance;
Any  mis-understanding of the requirement by the supplier;
The possibility of inadequate channels of communication between contracting authority and supplier;
Any changes to the contract brought about by altered requirements;
The possibility of unrealistic initial timescales (often the most common control issue in service contracts);
Any changing circumstances for the supplier (e.g. excessive growth, or reduced earnings leading to lay offs);
The possibility of supplier insolvency.

Often discussion with the supplier will be sufficient to keep control of the contract. However it is important to undertake ongoing and regular monitoring of a contract to ensure that the control issues are identified earlier and therefore allowing more time to implement corrective action and minimise the impact of any problems.

© 2007 Republic of Cyprus, Treasury of the Republic, Public Procurement Directorate
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