Chapter Three: contract management
=CHAPTER THREE CONTRACT MANAGEMENT=
Importance of Contract Management
Contract management involves activities performed by a PE after a contract has been awarded to determine how well the PE and the contractor performed to meet the requirements of the contract. It encompasses all dealings between the PE and the contractor from the time the contract is awarded until the work has been completed and accepted or the contract terminated, payment has been made, and disputes have been resolved. As such, contract management constitutes that primary part of the procurement process that assures the PE gets what it paid for. The basis of Contract management is the contract signed between the Client and the Contractor.
As a rule PEs are required to use PPRA Conditions of Contract drawn from Standard Tender Documents for Small Works, Standard Documents for Medium and Large Works. In situations where PPRA documents are not suitable, the contract document could be drawn from various sources such FIDIC, World Bank, European Union subject to approval of PPRA. For donor funded projects and where there is stipulation to use procurement rules of the funding agency, the documents approved by the funding agency shall be used and such approval from PPRA shall not apply. There are three aspects to a contract that must be managed while the assignment is being carried out: time, cost and quality as shown in Figure 3.1.
Time and cost must be measured against the budget and projected time required to complete the contract to detect deviations from the plan. The performance of the contract must be checked to ensure that the targets are being met.
Good contract administration assures that the end users are satisfied with the product or service being obtained under the contract. It is absolutely essential that those entrusted with the duty to ensure that the PE gets all that it has bargained for must be competent in the practices of contract management and are aware of and faithful to the contents and limits of the delegation of authority from their Employers.
