contract management plan template

Title: Contract Number: Name of Public Authority: Effective From: Approved by: …………………………………………….. (name of Accountable Authority or delegate) (title) (date and month) 2008 CONTRACT MANAGEMENT PLAN CONTRACT MANAGEMENT PLAN 2 of 21 DTF VERSION 010108 Refer Section 4.13 for annual approval requirements below: CONTRACT MANAGEMENT PLAN – ANNUAL APPROVAL Approved by Accountable Authority/Delegate Name (print) ……………………………………...………. Signature …………………….….………. Date ……./…..../….... Comments ………………………………………………………………………………………………………………………….. ………………………………………………………………………………………………………………………………………... CONTRACT MANAGEMENT PLAN – ANNUAL APPROVAL Approved by Accountable Authority/Delegate Name (print) ……………………………………...………. Signature …………………….….………. Date ……./…..../….... Comments ………………………………………………………………………………………………………………………….. ………………………………………………………………………………………………………………………………………... CONTRACT MANAGEMENT PLAN – ANNUAL APPROVAL Approved by Accountable Authority/Delegate Name (print) ……………………………………...………. Signature …………………….….………. Date ……./…..../….... Comments ………………………………………………………………………………………………………………………….. ………………………………………………………………………………………………………………………………………... CONTRACT MANAGEMENT PLAN – ANNUAL APPROVAL Approved by Accountable Authority/Delegate Name (print) ……………………………………...………. Signature …………………….….………. Date ……./…..../….... Comments ………………………………………………………………………………………………………………………….. ………………………………………………………………………………………………………………………………………... CONTRACT MANAGEMENT PLAN – END OF CONTRACT Approved by Accountable Authority/Delegate Name (print) ……………………………………...………. Signature …………………….….………. Date ……./…..../….... Comments (if appropriate, end of contract review undertaken?)…………………………………………………………….. ………………………………………………………………………………………………………………………………………... CONTRACT MANAGEMENT PLAN 3 of 21 DTF VERSION 010108 TABLE OF CONTENTS 1 PURPOSE OF THE PLAN.............................................................5 2 CONTRACT STRUCTURE............................................................5 2.1 BACKGROUND................................................................................................... 5 2.2 CONTRACT SUMMARY ..................................................................................... 6 2.3 PROCUREMENT RELATIONSHIPS .................................................................. 6 2.4 FILE REFERENCE ......................................................................................... 7 2.4.1 DOCUMENT REGISTER ................................................................................ 7 2.5 CONTRACT DETAILS ................................................................................... 8 2.5.1 CONTRACTOR (S).............................................................................................. 8 2.5.2 CONTRACT AUTHORITY OR PRINCIPAL TO THE CONTRACT ..................... 8 2.6 CONTRACT TERM AND EXTENSION OPTIONS ............................................. 8 2.7 PRICING ......................................................................................................... 8 2.8 CONDITIONS OF CONTRACT ........................................................................... 9 2.8.1 GENERAL CONDITIONS.................................................................................... 9 2.8.2 SPECIAL CONDITIONS ...................................................................................... 9 2.9 CONTRACT VARIATIONS ................................................................................. 9 2.9.1 PRICE VARIATION.............................................................................................. 9 2.9.2 PRODUCT VARIATION..................................................................................... 10 2.9.3 OTHER VARIATIONS........................................................................................ 10 2.10 INSURANCE...................................................................................................... 10 2.11 FINANCIAL CONSIDERATIONS...................................................................... 11 2.11.1 SAVINGS STRATEGY....................................................................................... 11 2.11.2 PAYMENT CONDITIONS.................................................................................. 11 2.11.3 INCENTIVE OR REBATES ............................................................................... 11 3 CONTRACT MEASUREMENT....................................................12 3.1 KEY PERFORMANCE INDICATORS............................................................... 12 3.2 SCRUTINY OF SUPPLIER DATA .................................................................... 12 4 CONTRACT MANAGEMENT......................................................13 4.1 IMPLEMENTATION OR TRANSITION-IN PLAN ............................................. 13 4.2 PRODUCT OR SERVICE STANDARDS EXPECTED...................................... 13 4.3 COMPLIANCE MANAGEMENT ....................................................................... 13 4.4 REPORTING REQUIREMENTS ....................................................................... 13 4.5 AUDIT REQUIREMENTS.................................................................................. 14 4.6 CUSTOMER SERVICE...................................................................................... 14 4.6.1 CUSTOMER SURVEYS .................................................................................... 14 4.6.2 BUYERS GUIDE................................................................................................ 14 4.7 CONTRACTOR MEETINGS ............................................................................. 14 4.8 RISK ASSESSMENT AND MANAGEMENT STRATEGY................................ 14 4.9 CONTRACT REVIEW DUE TO UNACCEPTABLE PERFORMANCE ............ 15 CONTRACT MANAGEMENT PLAN 4 of 21 DTF VERSION 010108 4.10 DISPUTE RESOLUTION PROCESS................................................................ 15 4.11 TERMINATION.................................................................................................. 15 4.12 ANNUAL REVIEW OF CONTRACT MANAGEMENT PLAN........................... 16 5 CONTRACT REVIEW..................................................................17 5.1 RENEWAL OR EXTENSION ............................................................................ 17 5.2 TRANSITION OUT ............................................................................................ 17 6 ATTACHMENTS..........................................................................18 CONTRACT MANAGEMENT PLAN 5 of 21 DTF VERSION 010108 1 PURPOSE OF THE PLAN The aim of this Plan is to outline how the (Department of Treasury and Finance (DTF) OR public authority name) will manage the Contract for (name of the contract) from award to the completion of the contract period. The Plan also lists the key performance indicators to monitor the effectiveness and efficiency of the contract. The obligations of the relevant parties, services to be performed and the terms and conditions under which the agreement will operate are detailed in this plan. Dynamic areas of this document that can be subject to change and may require updating by the relevant Contract Manager are marked with the following symbol . 2 CONTRACT STRUCTURE 2.1 BACKGROUND Provide a brief summary of the purchasing process that led to the contract. Items to be addressed may include: a) Purpose of the contract; b) Objectives; and c) Scope. NB: Information should be detailed enough to provide someone at arms length with a clear understanding to the background of the contract. CONTRACT MANAGEMENT PLAN 6 of 21 DTF VERSION 010108 2.2 CONTRACT SUMMARY Contract Number Commencement Contract Term [include extension options] Contract Framework e.g. sole supplier, panel Contract Authority (Under Treasurer, Department of Treasury and Finance OR title & public authority name) Approved Users Expected Major Users Buying Rules [if applicable] Estimated Contract Value Unit of Work e.g. Gem C 2.3 PROCUREMENT RELATIONSHIPS In the delivery of this contract there are a number of parties with various levels of contractual, financial and reporting involvement. The following diagram is an example that illustrates the various relationships between the relevant parties. For example: CONTRACT MANAGEMENT PLAN 7 of 21 DTF VERSION 010108 2.4 FILE REFERENCE Contract files Description 2.4.1 DOCUMENT REGISTER Document Name Location Provide a list of documents that are associated with the Contract eg, acceptance letter, the offer, the Request document etc. and where they can be found. Once DMS is more widely used all these documents should be contained on DMS files and therefore just the file reference section will be applicable. Contract Authority Distributors Contractor Contract Manager Buyers Reporting Financial Contractual CONTRACT MANAGEMENT PLAN 8 of 21 DTF VERSION 010108 2.5 CONTRACT DETAILS 2.5.1 CONTRACTOR (S) Name: [provide name of legal entity and ‘trading name’ if applicable] Address: Contractor’s Representative: Position: Telephone: Facsimile: E-mail: ABN: 2.5.2 CONTRACT AUTHORITY Name: (Under Treasurer, Department of Treasury and Finance OR title/public authority name) Contract Manager: Position: 2.6 CONTRACT TERM AND EXTENSION OPTIONS [Should be the same as stated in the Request document]. The Contract will commence from (specific date or the date of contract award). The contract is for an initial period of xx years. There are (number)-year or no contract extension options available under this Contract [Refer to Section 5.2 “Renewal or Extension” for the processes that need to be followed in assessing whether to extend the contract]. All extensions to the contract are at the absolute discretion of the Contract Authority. 2.7 PRICING Includes Total Contract Value, pricing arrangements and fee variations. If applicable a fee schedule may also be included. CONTRACT MANAGEMENT PLAN 9 of 21 DTF VERSION 010108 2.8 CONDITIONS OF CONTRACT 2.8.1 GENERAL CONDITIONS Delete the general conditions of contract that do not apply. [Option 1] The Contract incorporates the Department of Treasury and Finance General Conditions of Contract for the Supply of Goods and/or Services (July 2005) or Supply of Goods (1996) or Provision of Services (1996), or General Conditions of Contract for Engagement of Consultants -Management (1996). OR [if an IT Goods Contract] [Option 2] The Contract incorporates the Department of Treasury and Finance’s General Conditions of Contract for the Supply of Information and Communications Technology Goods and/or Services . OR [if an IT Services Contract] [Option 3] The Contract incorporates the Department of Treasury and Finance’s Government Information Technology and Communications (GITC) SPIRIT Framework Version WA4 OR [if other contract framework required] [Option 4] The Contract incorporates the Department of Treasury and Finance’s contract framework (insert name). 2.8.2 SPECIAL CONDITIONS List here any Special Conditions that are not already covered in the rest of this document eg Key conditions such as warranties and performance /bank guarantees, pre-contract arrangements or any additional conditions over and above those stated on the original tender. Where Special Conditions are too detailed to list here, general reference should be made to appropriate documentation and clauses. 2.9 CONTRACT VARIATIONS 2.9.1 PRICE VARIATION [Should be the same as stated in the tender document and/or as negotiated with suppliers] For example: a) Prices are fixed for the period of the Contract; b) Prices are fixed for the first year of the Contract. For each additional year, price variations will be permitted for annual changes in the Perth Consumer Price Index; CONTRACT MANAGEMENT PLAN 10 of 21 DTF VERSION 010108 Choose the required price variation clause – if using CPI index, the ‘Perth’ index is the default clause, unless a specific sector or industry index exists) or c) Prices are fixed for the first year of the Contract. Prices are then variable for changes in (State). Contractors shall apply in writing for approval each time a revised price is to be applied to the Contract. Twenty one (21) days prior notice is required for a Price Variation request. Substantive documentation will be required to justify applications for revised Contract prices during the term of the Contract. No price variation is payable unless and until approved by (title of accountable authority or delegate). 2.9.2 PRODUCT VARIATION Variations to product may include specification changes. Proposed changes to specifications of products and/or services must be evaluated against contract performance and possible changes should be documented for the benefit of future contracts or extensions. 2.9.3 OTHER VARIATIONS Note the contractual clauses that deal with variations (other than price or product) and summarise procedures (as per the clauses as outlined in the General Conditions of Contract or Special Conditions in the relevant request document). Particularly note any provisions that are known from the outset that may cause a variation. 2.10 INSURANCE The following details of currency have been provided: For example: Insurer Policy No. Insured Amount $ Expiry Date Exclusions Public Liability* Product Liability* Prof. Indemnity* CONTRACT MANAGEMENT PLAN 11 of 21 DTF VERSION 010108 * delete if not applicable Include procedures whereby evidence is provided by the contractor of the existence and currency of insurance policies required by the contract. 2.11 FINANCIAL CONSIDERATIONS 2.11.1 SAVINGS STRATEGY Information should cover the following points. • Explain what the performance objectives of the contract are and how these are going to be achieved i.e. how is the contract going to be managed to achieve the desired outcomes. • Detail the strategies for achieving savings in line with the harvesting database for example buyer behavioural change. 2.11.2 PAYMENT CONDITIONS If there is a clause in the request documents stating payment conditions it should be inserted at this point. Detail should also be provided on how is the payment schedule set up? Examples include lump sum on completion or delivery, payment on completion of deliverables, monthly for work done to date. Include target dates set up eg to meet funding commitments. 2.11.3 INCENTIVE OR REBATES Describe any incentive arrangements included in the contract and how they are to be measured. CONTRACT MANAGEMENT PLAN 12 of 21 DTF VERSION 010108 3 CONTRACT MEASUREMENT 3.1 KEY PERFORMANCE INDICATORS (Should be the same as shown under “Contract Management” in the relevant request document). The Business Case and Procurement Plan should be consulted to ensure that the performance indicators are consistent with those provided here. As a minimum, KPIs should include: a) Savings i.e. how are they going to be measured. Detail can also be provided as to the type e.g. corporate or retail. b) Turnover/compliance; and c) Client satisfaction levels acceptable. 3.2 SCRUTINY OF SUPPLIER DATA [CUA ONLY] Supplier data are assessed for quality and validity and as a minimum the following criteria should be used: • Trend analysis of sale figures collected or orders placed; • Verification of sale figures against spend by key clients; • Comparison of contract and actual prices; • Examination of Nil returns of sales. CONTRACT MANAGEMENT PLAN 13 of 21 DTF VERSION 010108 4 CONTRACT MANAGEMENT 4.1 IMPLEMENTATION OR TRANSITION-IN PLAN Transition covers the period between the signing of the contract and the commencement of product/service delivery. Key issues to consider include: • Planning the hand over • Managing the implementation • Implementing monitoring systems. The previously agreed plan should be included as an attachment. A sample ‘Transition Plan’ has been provided at “Attachment B”. 4.2 PRODUCT OR SERVICE STANDARDS EXPECTED Should detail anything written into the contract to deliver product or service standards and how it is intended that they will be administered. Where required standards are substantial/complex, a brief summary should be noted here with references to the appropriate document/s and clauses. 4.3 COMPLIANCE MANAGEMENT The Contract Authority and Contractor are required to comply with various policy, procedural, reporting, record keeping and contractual obligations. The Contract Manager will be responsible for management of these obligations. These obligations are outlined in “Attachment A” 4.4 REPORTING REQUIREMENTS (Should be the same as shown under “Contract Management” in the relevant request document). Reporting requirements should include: a) What is to be reported (e.g. turnover by agency/product); b) Reporting format (written and /or verbal); c) Frequency (weekly, fortnightly or monthly); and d) Source of Information (contract authority or contractor offices). CONTRACT MANAGEMENT PLAN 14 of 21 DTF VERSION 010108 4.5 AUDIT REQUIREMENTS Detail the requirements for both internal and independent audits and elements of the Contract to be audited. 4.6 CUSTOMER SERVICE 4.6.1 CUSTOMER SURVEYS If required, the contract manager may need to conduct a survey to gauge customer satisfaction. Detail should be provided on: a) Type/format of survey b) Frequency of data collection. 4.6.2 BUYERS GUIDE [PANEL CONTRACT ONLY] The buyers guide is used as a tool to drive buyer behaviour and contains information relating to the buying rules for the contract. The buyers guide will be kept up to date by the contract manager on a regular basis. It may be useful to insert a hyperlink here to the relevant buyer’s guide. 4.7 CONTRACTOR MEETINGS It may be useful to provide a schedule of meetings specific to the contract. For example a listing of the quarterly meetings held throughout the term of the contract. 4.8 RISK ASSESSMENT AND MANAGEMENT STRATEGY Risks may vary during the contract and the CMP will need to be updated accordingly. The risk assessment and management strategy should include: Risks Identified Examples of risk include: • The service is new to Western Australia; • The service is based on an emerging technology; • The project has environmental implications; • The service provided is heavily dependent on the contract; • Contract complexity means terms and conditions may be misunderstood; and CONTRACT MANAGEMENT PLAN 15 of 21 DTF VERSION 010108 • Contract performance requires involvement of third parties. Consequences of that risk Likelihood of that risk occurring Strategy for minimising or dealing with that risk What action is to be taken to prevent or minimise the impact on contract and performance outcomes should any of the identified risks occur? Complete the table provided in “Attachment C” or refer to a specific Risk Management Plan if one exists. 4.9 CONTRACT REVIEW DUE TO UNACCEPTABLE PERFORMANCE Outline the trigger point at which contract review becomes necessary due to unacceptable performance. Include reasons for any variation from performance targets. Occurrences such as falls in client satisfaction, response times, complaints, failure to deliver and down time should trigger contract review or re-formulation. 4.10 DISPUTE RESOLUTION PROCESS Dispute resolution is detailed in the Terms and Conditions of Contract. If applicable, state the clauses outlined in the “Special Conditions” of the relevant request document. Include procedures specified in the Contract for the Contract Authority and the Contract Manager to monitor and report on the contractor’s performance including the severity of any breaches, the need to seek redress and sources specified for redress. Reference could also be made to the contract management system (CDMS) once it is released. 4.11 TERMINATION In the event of the Contractor failing in any manner to carry out the Contract to the Contract Authority’s satisfaction, the Contract Authority may terminate the Contract by written notice to the Contractor. Reasons may include: a) Those stipulated in the General Conditions of Contract for the [insert relevant Conditions of Contract]; and CONTRACT MANAGEMENT PLAN 16 of 21 DTF VERSION 010108 b) Those stipulated in Request XXXXX Special Conditions of Contract; [Prior to any termination, State Solicitor advice should be sought to ensure that there are sufficient and legal grounds to terminate. Otherwise the Government maybe in breach of the Contract and held liable for damages or other legal action by the Contractor]. 4.12 ANNUAL REVIEW OF CONTRACT MANAGEMENT PLAN For purposes of consistency, accountability and transparency, the Contract Management Plan is to be reviewed by the (Contract Manager or other title) and signed off by the (Assistant Director or Accountable Authority/Delegate) on, or before, the annual anniversary date of the Contract. Changes to the Plan should be summarised and noted in the comments section by the (Contract Manager or other title) prior to submission to the (Assistant Director or Accountable Authority/Delegate). The (Assistant Director or Accountable Authority/Delegate) is to sign and date the inside cover of the Plan. CONTRACT MANAGEMENT PLAN 17 of 21 DTF VERSION 010108 5 CONTRACT REVIEW The contract management plan should outline the process that will be followed in assessing whether to extend, renew or finalise the contract and the steps to be taken on contract recall as the contract nears expiry. 5.1 RENEWAL OR EXTENSION Does the Contract contain provisions for renewal or extension? (refer section 2.6 – “Contract Term and Extensions Options”). If so: How and who will decide if renewal or extension will be implemented? The review will need to determine: a) What is the initial contract value (excluding extensions); b) What is the estimated value of extension; c) How many variations have been issued to date; d) What details are there regarding the current contractor’s performance; e) What is the reason for extending the contract including, but not limited to, the benefits and anticipated cost; f) What are the expected savings as a result of the extension; and g) What is the impact of not extending the Contract? 5.2 TRANSITION OUT Are there any handover, training or special transition arrangements to be undertaken at completion of the project? CONTRACT MANAGEMENT PLAN 18 of 21 DTF VERSION 010108 6 ATTACHMENTS Depending upon the type and scope of the contract a variety of attachments may be required. For documents, such as the buyer’s guide, that are separate documents a hyperlink should be inserted to direct users straight to the source. Examples include: a) Buyers Guide; b) Contract Obligations c) Service level agreements; d) Risk management plans; e) Implementation or transition plan; f) Invoicing and payment schedule; and g) User /client survey questionnaire. CONTRACT MANAGEMENT PLAN 19 of 21 DTF VERSION 010108 EXAMPLE ATTACHMENT A COMPLIANCE MANAGEMENT -CONTRACTUAL OBLIGATIONS Who Function Clause Reference Obligation Contractor CM Due Reporting 2.5.22 Submission of quarterly reporting End of Quarter Monthly Data End of Month Insurances 2.5.23 Maintain current insurances Review Currency of Insurance End of Contract Review 30/12/04 Reviews 2.5.24 Client Ongoing CONTRACT MANAGEMENT PLAN 20 of 21 DTF VERSION 010108 EXAMPLE ATTACHMENT B TRANSITION PLAN Tasks Start Date Finish Date Action 1. Meet with current Fleet Manager to discuss impending transition 23/2/07 26/2/07 Complete 2. Fleet Manager to provide the data requirements specification 24/2/07 5/3/07 Complete 3. Consolidate Fleet Manager’s requirements into master specification 8/3/07 19/3/07 Complete 4. Circulate Master Specification to Fleet Manager for comment 22/3/07 26/3/07 Complete 5. Prepare information for Client Seminar (30/3) 22/3/07 29/3/07 Complete 6. BG to determine list of agencies having to change Fleet Manager 22/3/07 22/3/07 Complete 7. BG to contact DPI Licensing Services to determine any licensing issues 22/3/07 25/3/07 Complete 8. BG to identify Fleet Manager supplier sources. 22/3/07 25/3/07 Complete 9. Finalise Master Specification 29/3/07 1/4/07 Complete 10. Client Seminar 30/3/07 30/3/07 Complete CONTRACT MANAGEMENT PLAN 21 of 21 DTF VERSION 010108 EXAMPLE RISK MATRIX ATTACHMENT C RISK SOURCE PROBABILITY IMPACT RATING ACTION WHO WHEN 1. SAVINGS Forecast savings not being achieved Unlikely Low Low • Quarterly reporting (with monthly information) will track expenditure DTF Contract Manager & Contractors Ongoing 2. SERVICE Services provided by contractors are inadequate or of poor quality Unlikely Severe Low • Monitor KPI’s at quarterly reviews meetings. • Investigate comments received from agencies. DTF Contract Manager & Contractors QRM’s & Ongoing 3. CONTRACT MANAGEMENT Contractor becomes insolvent Unlikely Moderate Low • The panel provider arrangement for Fleet Management will mitigate the risk DTF Contract Manager & Contractors Ongoing