6.7  The relationship between contract administration and performance monitoring

Contract administration involves monitoring the performance by the private party of its service delivery obligations. The contract administration manual should include actions required to implement the performance monitoring and reporting strategy developed according to Chapter 11. 

To ensure appropriate monitoring of the project and the private party's performance, the government party should:

•  review the project deed and other relevant project contracts in order to:

-  confirm the reporting obligations on the private party; and

-  identify the timeframes in which these obligations must be undertaken; 

•  identify obligations of the private party under the project deed and other relevant project contracts that are not subject to specific reporting obligations but need to be monitored by the Government and identify how the government party will monitor these obligations; and

•  identify any obligation which should be implied into the project contracts by law or through the private party's conduct.

The above should be captured in the contract administration manual.

The contract director will have responsibility for signing off on payment of the service payment invoices submitted by the private party, after satisfying themselves that the private party has fully met their service delivery and other KPI requirements.

Service delivery under the project deed will also support the government party meeting its output performance targets under the Victorian Government's output funding model, and the contract director will need to also sign off on whether or not performance targets have been achieved in this respect.

In some projects, other members of the private party's consortium will have obligations to the government party through a direct contract with the government party (for example, a tripartite agreement or a guarantee). The government party must review the relevant party's obligations to the government party under these documents in the same way it reviews the private party's obligations under the project deed. These obligations should also be included in the contract administration manual.