Management Interface

The central aim of contract management is to obtain the services as agreed in the contract and achieve value for money. This means optimizing the efficiency, effectiveness and economy of the service or relationship described by the contract, balancing costs against risks and actively managing the customer-provider relationship.

The foundations for contract management are laid in the stages before contract award, including the procurement process. The terms of the contract should set out an agreed level of service, pricing mechanisms, provider incentives, contract timetable, means to measure performance, communication routes, escalation procedures, change control procedures and all the other formal mechanisms that enable a contract to function. These formal contract aspects form the framework around which a good relationship can grow.

Increasingly, public sector organizations are moving away from traditional formal methods of contract management (which tended to keep the provider at arm's length and could become adversarial) and towards building constructive relationships with suppliers. The management of such a contract, in which the specification may have been for a relationship rather than a particular service, requires a range of 'soft' skills in both the customer and the provider.

(Source: Contract Management Guidelines, Office of Government Commerce, draft version April 2002)

Contract responsibilities

If the bid specification includes a draft form of contract, this will indicate the respective responsibilities of client and contractor. Confirm your understanding on these matters, and identify in the bid aspects of the contract where there may appear to be uncertainties. A clear statement of responsibilities is particularly critical in contracts that integrate client and contractor personnel within a joint team: the technical and managerial control of the work has to be proof against misunderstanding.

In addition to the professional and technical responsibilities of the contract, there may be a substantial requirement for administration and document management, particularly on complex projects involving large teams. Check whether the bid specification makes it clear how the client expects this to be handled - by its own staff or by administrative personnel in the contractor's team?

Where a contract involves the participation of several client organizations or interested parties - for instance, a number of public sector authorities, different units within a business group or even other contractors working on related projects - or where it combines the efforts of separate professional teams, it can be helpful to include a figure showing how you envisage the proposed structure of management relationships for the assignment. Management diagrams should be drawn in a form that makes relationships appear direct and uncomplicated, with a balanced structure.

Change management

Project requirements will inevitably change during the course of the work, not least because there are matters that neither the client nor the contractor is able to define in precise detail at the procurement stage. New ideas may come to light that benefit the performance of the contract, and other circumstances may suggest the need for departures from an initially agreed specification. These changes may make an impact on the budget and the completion date, requiring a flexible and pragmatic approach on the part of both client and contractor. Clients may recognize this point by asking bidders to submit proposals for change management - covering matters such as the costing, scheduling and resourcing of change, and processes for assessing the impacts of change and translating the results of the assessment into action to minimize risk to the contract.

Management communication

Contractors who choose to keep at a distance from their clients cannot expect a long working life. Maintaining a continuous, close and transparent process of dialogue is a principle that clients view as critical to the success of the client/contractor relationship. It means that if problems emerge they can be resolved jointly and early, before they begin to threaten the performance of the contract. The more complex the assignment, the more important it becomes to present a direct channel of accountability for its performance and to ensure that communication is consistent at every level in the management structure of the contract. If you are proposing to use subcontractors on a significant proportion of the work, emphasize your commitment to maintaining consistent and efficient communication with them.

Unless the point is covered in the bid specification, indicate that you would expect the client to nominate a counterpart manager to your team leader who would be the point of contact for both formal coordination and informal liaison. You will need the assistance of this manager in making the necessary introductions, obtaining internal data and ensuring that you are received helpfully throughout the client organization.

If the assignment is in a country where English is not the first language, what will be the language in which technical meetings with client personnel are conducted? You will be at a disadvantage if difficulties arise and you are unable to communicate your viewpoint effectively. Indicate in the bid your understanding or assumptions on this point.

Role of a steering group or technical committee

In managing large-scale contracts, clients may choose to set up a supervisory steering group, responsible for monitoring the direction of the work at a strategic level and providing policy guidance, or a technical committee acting as a forum for the discussion of findings, issues and recommendations and possibly exercising a measure of technical and financial control over the contract. Meeting at intervals related to progress reports and the production of other deliverables, both these management bodies may include representatives of the contractor as well as client interests. Where this form of management coordination is not indicated in the bid specification, it may nonetheless be appropriate to suggest its adoption, since a steering group offers a useful means of managing changes in the project design and resolving conflicts of priorities within the work programme.

Project logistics and support

The bid specification will normally indicate when the contractor is required to start work or to have staff at the project location: this is normally expressed as within a certain number of days after signature of the contract or agreement. Confirm your ability to fulfil this requirement.

If the specification does not identify the services and facilities to be provided by the client, you should indicate the level of client support that you regard as necessary or would reasonably expect to be provided. In certain contexts, it may be useful to itemize the minimum facilities that you will need in order to start constructive work as early as possible.

The main categories of client support that may be covered in a contract are as follows:

• administrative, secretarial and other support staff;

• working space and office equipment;

• telecommunications equipment and facilities, including fax lines and Internet links;

• data, plans, maps, reports and other documentation;

• computer facilities and access to databases, management information systems, data communications networks and in-house IT assistance;

• technical and scientific equipment;

• laboratory facilities;

• training premises, materials and equipment;

• word-processing, copying, scanning and document production services for project material;

• the use of cars and other forms of local transport for contract purposes;

• (on contracts overseas) assistance with visas and permits.

Does the specification indicate whether the contractor is expected to work in the client's offices or in separate office accommodation? There are advantages to be gained from having dedicated and suitably equipped office space on the client's premises: access to client information, ideas and feedback is easier and working relationships with client personnel are strengthened. But there may also be drawbacks such as security formalities, difficulties in gaining entry outside normal working hours and problems in keeping papers, phone calls and discussions confidential. And you are certain to face problems if you use the client's office as a base for your own marketing activity.