What is a contract management plan?
A contract management plan contains all the key information about how a contract will be managed. It establishes systems and processes to ensure that the contractor complies with the terms and conditions during the performance of the contract.
A contract management plan enables the contract manager to:
- develop a good understanding of the contract, and the responsibilities of the parties involved; and
- establish a system against which the performance of both parties can be monitored and problems can be identified early - either before or as they occur.
Do I need a contract management plan?
A formal contract management plan is not required for all contracts, but is strongly recommended where the contract involves large dollar amounts, includes complex technical requirements, or when the contract manager is responsible for managing a large number of contracts simultaneously.
When should the contract management plan be developed?
The contract management plan is a living document. Its development should commence during the procurement planning stage, and it should be reviewed and updated throughout the procurement process and the life of the contract.
At the procurement planning stage, consideration needs to be given to:
- who will manage the contract;
- how the contractor's performance will be monitored;
- what the risks associated with the contract are, and how they will be managed during the course of the contract; and
- what reporting requirements will be required of the contractor.
During the finalisation of the contract, details need to be agreed in relation to:
- performance measures to be used;
- confidentiality provisions;
- reporting requirements; and
- implementation/transitional issues.
At the beginning of the contract management phase, the contract manager should finalise the plan, by identifying the critical clauses in the contract and other requirements that may influence the management of the contract. The plan should be updated throughout the course of the contract as circumstances require.
What should be included in the contract management plan?
The level of detail included in a contract management plan will vary, depending on the nature of the goods or services being purchased. The majority of the information needed to complete the contract management plan will be located in the contract (including the specifications and the contractor's tender documentation).
Who develops the contract management plan?
The contract management plan should be developed by the contract manager, who preferably will have also been involved in the planning stages of the purchase.