Contract Administration and Its Major Components

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Table of Contents

Abstract
Introduction
Main body
Conclusion
Reference List

Abstract

Contract Administration involves those activities undertaken by government officials after a contract has been awarded to do evaluation on how well the government and the contractor performed in order to meet the goals of the contract.

Introduction

Contract administration encompasses negotiating the terms and conditions in contracts as well us ensuring these terms have been met. Changes that might arise during execution of the contract are as well documented and mode of handling them agreed on in the contract management (Kubasek, 2012). Contract administration has three major components that if put in practice, makes it a very effective tool in management. They include:-

Contract Administration and Oversight.
Change Management Processes and
Dispute Resolution.

Main body

Contract administration and oversight involves planning, monitoring, contract performance and payment approval. Planning involves understanding all the components of the contract including all the expected outcomes of the contract, contract cost, performance, any acceptance or rejection terms, date of the contract and important contact information to ease communication between the contractor and the government (Kubasek, 2012).

Monitoring contract performance entails understanding the factor that will be monitored and the procedures that will be applied in evaluation of performance. Monitoring should also determine the factor to be monitored and establishment of possible results for individuals involved with contract monitoring. Risk assessment is also included in monitoring of performance to help them in reviewing contactors and the core factor to be included in the review. Valuable results obtained from such reviews can be used by the government officials to train the contractors.

Payment approval as an important tool in contract administration deals with authorization of payments in accordance to the contract terms and ensuring appropriate documentation of such procedures.

Change Management involves administrative changes, constructive changes and substantive changes. To begin with, administrative changes are those that arise within the scope of the contract such as changes in contact information.

Constructive changes on the other hand occur when the contractor comprehends that the work he is required to perform is beyond the scope of the contract, for example, included suggestions, different work procedures, changes in work sequencing, delay in reviewing of invoices and approval of necessary payments as well as interference with the performance (Kubasek, 2012).

Substantive changes are those that affect both the contractor and the organization giving them the contact, for example, the government. These changes include those that arise from changes in price, changes in quantity of materials, changes in core personnel, changes in form of deliverables and changes in terms and conditions of the contract (Kubasek, 2012).

Formal procedure for change management includes:-

For all changes, they should ensure formal, written approval prior to them occurring.
They should ensure the examination of the effect of each change to the objective of the contract including the cost, the contracting schedule, standards and accepted criteria.
For contracts with contingency allowance it is advisable for them to develop a plan on how the change in contingency affects the allowance.
They should facilitate thorough documentation of changes.

Dispute Resolution involves steps that should be followed in attempt to resolve any disagreement. Their first step is to identify the problem and then they will research facts about it. This is followed by conducting appropriate evaluations as they ensure open communication between parties involved in the dispute. The issue is then resolved and the resolution activities is finally documented.

Conclusion

In conclusion, contract administration is the best way to keep employees under checks and ensure that they remain committed to the conditions of their contracts.

Reference List

Kubasek, N. K., Browne, M. N., Herron, D. J., Giampetro-Meyer, A., Barkacs, L. L., Dhooge, L. J., & Williamson, C. (2012). Dynamic business law (2nd ed.). New York, NY: McGraw-Hill/Irwin.

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Contract Administration and Its Major Components

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