Contract Administration
| Both buyer and seller administer contracts to make sure that the obligations set forth in the contract are met. Both must perform according to the terms of the contract. If you are on the project management team, you must be aware of the legal issues and implications as you administer the contract. Several project management processes are applied when administering the contract. Among them are performance reporting, quality control, integrated change control, and risk monitoring and control. Each one of these processes helps the project manager manage the contract. During contract administration, performance by the seller is reviewed and documented so that any questions arising from the execution of the contract can be negotiated. Future relationships with the seller may also be determined to a great extent by how the current contract is fulfilled. The project manager should be certain that documentation concerning various aspects of the contract is saved and available as the project progresses. This documentation will be the basis for issue resolution if there are any questions concerning how the contract was fulfilled.
The answer is B. When administering a contract, the project manager should be certain to include processes specific to project management to get the best possible control of the project execution.
The answer is D. Both the buyer and seller should administer the contract to make certain that the obligations in the contract are being met.
The answer is B. Change control terms should be specified in the contract and used to manage any changes made prior to contract closure. Inputs into contract administration include the contract itself, the contract management plan, selected sellers, performance reports, approved change requests, and work performance information. The performance reports are done by the seller and include technical documentation of work done on the project as well as the actual performance reports themselves. The buyer reviews these reports to ensure that the performance of the seller meets the obligations of the contract. The tools and techniques used in contract administration are a contract change control system, buyer-conducted performance reviews, inspections and audits, performance reporting, the payment system, claims administration, records management system, and information technology. The change control system defines the process by which the contract can be changed. This process should be part of the contract itself, and all the necessary approval levels should be discussed in this part of the contract. The seller will give the buyer performance reports, and the buyer will conduct performance reviews that show differences between the baseline of the project and the actual performance. This will include quality, cost, and schedule as the major parts of the review. Any contract non-compliance, as well as successes, will be noted during the buyer performance review. Inspections and audits are a type of buyer performance review. The inspections and audits are used to identify variations from the original plan by the seller and are expected to help disclose any problems in the seller's work plan or execution of deliverables during the execution of the project. The payment system controls payments to the seller and may be controlled by the accounts payable function of the buyer. On very large projects, the project itself may require the development of a payment system different from that of the organization. The project management team must review and approve payments made. If the buyer and the seller cannot agree on what changes have been made, what the compensation is for the change, and even whether or not a change has occurred, claims will be made that must be settled either by the two parties or in accordance with procedures delineated in the contract. Contested claims may in some cases escalate into litigation, so the managing of claims administration is an extremely important facet of project management. The records management system is a set of processes used by the project manager to manage contract documentation and records. As mentioned several times, it is imperative that contract administration be based on documentation. The records management system will be the system that controls the documentation for the project. The outputs for contract administration include contract documentation, requested changes, recommended corrective actions, updates of organizational process assets, and updates to the project management plan. Contract documentation includes the contract itself, supporting information, and all change request information, both approved and unapproved. All documents relating to the contract are managed in this part of contract administration. When changes are requested, it is just as important to save the changes that were not approved as those that were. This facet of contract administration will ensure that the project manager has complete records of all requests and the reasons for disallowing or allowing changes as they were requested. This information can be very valuable as the project goes on and may be reviewed if the same changes are requested at a later time in the project. The recommended corrective actions are any actions that need to be taken to bring the seller into compliance with the terms of the contract. Note that the burden of performance in this area is on the seller. The recommended corrective actions can come from the seller himself or herself or from the buyer. In any case, the corrective actions deal with the contract and its fulfillment. Updates to the organizational process assets will include saving any correspondence that has occurred between the buyer and seller. If the project has an external payment system, payment schedules and requests are a part of the updates. The seller performance evaluation documentation is also a part of the updates to organizational process assets. The updates to the project management plan include the procurement management plan updates and also the contract management plan updates. As subsets of the overall project management plan, these two plans should be updated whenever changes are made.
The answer is B. The baseline of the project is used when looking at variances between planned and actual performance.
The answer is A. The seller must document work being done on the project, and this is done in performance reports.
The answer is C. The buyer conducts periodic performance reviews and rates the performance based on the differences between the baseline documents of the project and the actual performance of the project.
The answer is A. These are used to disclose variations from the original project plan.
The answer is C. If the organization has this type of function within it, it will control the payments to the seller. There will also be times when the payment system will be administered by someone within the project team. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EAN: 2147483647
Pages: 167