Implement contract management activities

Understand what activities are involved in contract management.

What is contract management?

Contract management is the process of managing contracts from creation through execution to analysis and renewal or termination.

The objective of contract management is to ensure the agency achieves value for money through the course of the contract.

What are contract management activities?

Contract management activities include:

  • maintaining records related to the contract
  • regulating change (variations)
  • monitoring budgets and costs
  • checking invoices and authorising payment
  • ensuring the contract is meeting the agency’s needs and delivering value for money
  • monitoring deliverables
  • monitoring service provider performance
  • ensuring quality standards are met
  • managing risks and issues
  • managing relationships
  • control of data and related security

Regardless of the length of the contract, contract management:

  • is an ongoing activity
  • needs appropriate resources
  • is best undertaken following a plan

Contract management activities must address:

Tailor contract management activities to suit the contract, considering the contract’s:

  • size and length
  • scope
  • complexity

How to implement contract management activities

Step 1: Transition activities, if any

Is this contract transitioning from a previous contract?

  • If yes, conduct transition activities according to the previous contract’s:
    • contract management plan
    • transition plan, if used.
  • If no, go to Step 2.

Step 2: Review the draft contract management plan

Review the draft contract management plan developed in Plan for contract management.

Update the contract plan as needed, considering:

  • earlier planning activities
  • the offer received
  • the result of any negotiations over the offer
  • the contract

Step 3: Review the contract’s budget

Review the contract’s budget and payment schedule. Follow Agency processes to ensure funds are available to pay scheduled invoices.

Step 4: Resources to support contract management

Confirm the resources needed to support contract management activities. For large contracts, contract management may be a team activity.

Resources may include:

  • people, such as contract managers
  • data systems
  • specialist support

Examples of contract management resources include:

  • engaging a quantity surveyor to confirm that invoices for a building project reflect work completed
  • implementing a client relationship management system to record client queries and service requests

Step 5: Finalise and implement the contract management plan

Finalise the contract management plan, addressing Steps 1 – 4.

Implement any other contract management activities documented in the contract management plan.

Step 6: Manage probity and conflicts of interest

Manage probity – consider issues raised at Probity issues by stage and task.

Conflicts of interest can arise during this task. Identify, declare and manage these.

Ensure that processes are established to record contract management activities. Good record keeping helps to:

  • manage risk
  • provides auditable evidence of events and decisions.

Records of meetings, reviews and any resulting actions provide:

  • context on the relationship between the parties
  • confirm decision made and related follow up actions
  • can be used for resolving issues.

Step 7: Address Agency rules

Consult Agency procurement team for advice on meeting:

Follow Agency specific rules on when to seek an approval and who can give the approval.

Follow Agency specific rules for recording decisions and storing records.

Step 8: Meet with service provider

Meet with the service provider’s staff to discuss and agree, in accordance with the contract:

  • expectations
  • planning
  • reporting
  • payment
  • monitoring arrangements
  • communication
  • feedback

Step 9: Transfer data and material, if needed

Transfer to the service provider Agency data and materials, as set out in the contract.

Step 10: Payment on starting the contract, if any

If the contract requires a start-up payment, follow Agency procedures to make this payment.