Contract management activities take place in three main phases, however, planning for contract management should happen before the contract is signed. Each phase requires very distinct activities depending on the type of contract being managed. The level of contract management should be commensurate with the complexity and risk profile of the contract you are managing. For example, transactional and routine contracts may only require simple processes compared to a complex or strategic contract. The contract management activities table at the start of each section will help you to identify which activities are appropriate for your contract. The decision on which activities should be included as part of the contract management arrangements should be made using judgement and based on the complexity and risk profile of the particular contract.
The phases of contract management are:
In this phase planning activities are done together with the sourcing process. As you plan, evaluate and negotiate the contract, you need to consider the way in which the contract is drafted, delivery and acceptance issues, performance management regimes etc. Effective planning will have an impact on how the contract is managed and contribute to a successful outcome. | ||
In this phase the contract manager identifies the key roles and management activities needed to effectively manage the contract throughout its entire term. This phase should involve allocation of accountability for the different contract management activities. This enables a sensible allocation of risk and resources to the contract and helps minimise the risk of contract failure. | ||
In this phase the main part of the contract is performed and the required goods or services are delivered. Good contract and stakeholder management will enable the Australian Government to obtain the full benefits of the contract and achieve the value for money outcomes identified during the procurement sourcing process. | ||
In this phase contractual obligations and liabilities between the parties are finalised. It may also include transitioning to a new supplier for goods or services. Proper review in this phase will allow the procuring organisation to measure if value for money was achieved during the life of the contract. It also enables identification of process improvements or developments ensuring continuous improvement of the procuring organisation's processes and may contribute to better value for money in future procurements. |