Risks identified previously may be relevant at this stage of the cycle and should be considered along with any risk management plan that has been developed.

Risks to the management of individual contracts can include the following:

Sources of risk

Examples of risks

Contract management capability

•  Failure to have sufficiently skilled and experienced resources to effectively manage the contract(s)

•  Lack of recognition of the importance of contract management

•  Failure to act on contractor underperformance

Contractor performance

•  Failure to provide contract deliverables on time, to the agreed quality standards

•  Failure to adhere to the agreed budget

•  Failure to comply with all contract provisions, for example, privacy, security, recordkeeping

•  Fraud and/or unethical conduct by the contractor

Changes in circumstances and/or requirements

•  Contract changes not dealt with as contract variations

•  Contractor not prepared to agree to contract variations to accommodate changes in entity requirements

•  Changes in circumstances not managed in a timely manner

Stakeholder relationships

•  Stakeholders not consulted and/or kept informed about contract performance

•  Changes in stakeholder expectations not communicated to contract manager

•  Differing and/or conflicting stakeholder expectations

Ensuring that any identified risks are dealt with appropriately may require a specific risk mitigation plan to be developed. Such a plan need not be long and cumbersome; it may consist of a simple checklist or it may be a detailed plan that requires periodic review and updating throughout the life of the contract. Where a contract is to be managed by a team over a longer period of time, a plan may assist with coordination among team members and stakeholders. The issues discussed below should be addressed by any plan or checklist developed to guide the contract management.

In addition, consideration should be given to the need to develop appropriate contingency plans to address unplanned or unexpected events. Such plans may be required where the consequence of contract failure is critical to a range of stakeholders, such as members of the public.

  The Example Risks and Risk and Treatments at the end of this part can be used in developing a risk plan for individual contracts.

Ensuring that any identified risks are dealt with appropriately may require a specific risk mitigation plan to be developed.