Contract Administration Best Practices

Contract Administration Best Practices

Diana Thomas

University of Phoenix

Law/531- Business Law

August 23, 2012

Trina Eaddy

Introduction

This essay will examine how to best prepare a contract administration plan. The contract administration plan will examine different methods used in preparing a plan. This essay will explain how important it is to have technical and other support of personnel, the importance of surveillance, and to determine what functions need to be delegated, identify qualified personnel as well as authorized, it is necessary for the Contracting officer to be represented in administering contract requirements. Also there will be a discussion on what is determined from the contract administration functions and how they will be delegated.

Contract Administration

Contract administration is used to describe the functions performed after the business parties have signed the contract. It refers to those activities that take place after contract award and can encompass a plethora or activities, ranging from routing to unusual. Most contract administration is goal-oriented, aimed at enforcing the contracts terms and conditions while giving attention to the achievement of the stated outcome.

Contract administration is the management of contracts made with partners, employees, customers, and vendors. Generally refers to the management of all actions after the award of a contract. Contracts can be many types from purchasing, sales, trade, partnership, and intellectual property agreements.

The extent and nature of contract administration varies from contract to contract. There are factors that influence the degree of contract administration, the type of contract, which includes the nature of the work, and the experience, and commitment of the personnel involved. Contract administration begins with developing clear, concise performance-based statements of work and preparing a contract administration plan that cost effectively measures the contractor's performances and provides documentation to pay accordingly (Geek, 2012).

Preparing a contract administration plan is important to clarify in the plan the duties and scope of authority by the company's contract administrator. It depends on the company; the contract administrator may not be the same person with the power to award, modify, or sign the contracts. At this time is a need to be made clear and provided for the plan that the contract administrator should not make oral or written agreements to contractors outside the scope of his or her practice. Contract administration planning helps to determine the required level of surveillance, functions that will be delegated.

Contract administration will explain the function of post award orientation. It is an opportunity to clarify the understanding of the specific contract requirements. In this should include the contractor's role, the contract quality control and testing oversight power, and billing, and payment procedures. Early post awarded clarifications can help reduce misunderstanding early in the process. Contract administrator's technical performance monitoring duties should be described. This may involve making a visit to the business, and review the contractor's performance reports and meeting directly with the contractor regarding the progress. One important thing in the contract administration plan is that it needs to be made clear in regards who within the company should receive notice of the contractual or technical difficulties encountered during the process.

In the plan there needs to be provided the procedures for conducting a cost audit that will help ensure the budgets are maintained. Reason for this is for cost-reimbursement contracts as opposed to fixed-priced contracts.

There also needs to be a segment in the contract that discusses the process for invoice payment for delivered products and services. How the payments are to be made and to provide a written detailed contract.

Last there needs to be modifications and corrections. Contract administration should address the procedure needed to notify management or executive personnel regarding the need for the modifications and corrections. The documentations of the plan need to meet the requirement