Contract Administration

1. Contract Administration

3. What is Contract Administration? The management of all actions, after the award of a contract, that must be taken to assure compliance with the contract

4. Contract Administration… Ensures and documents that the contractor is performing in terms of the agreed upon • Goods/services • Time frames • Level of quality

5. Contract Administration… It also refers to the regular use of consistent and standardized methods for measuring a contractor’s compliance

6. Contract Administration Challenges • Incorrect or unsatisfactory services are provided • Poor performance • Delay in delivery or completion • Dispute over definition of acceptance (when is the project finished?) or a Change Order (to issue or not) • Personality conflicts between vendor and agency

7. Why Is Contract Administration Important? • It’s the law • Assures contractor compliance on an ongoing basis • Allows for course correction • Assures that funds are spent wisely • Maximizes client services

8. Contract Administration • Who? • What? • How? • When? • Why?

9. Who? • The Contract Monitor(s) is/are identified in the Work Plan by the Supervisor • Must be Program Monitor • May be Fiscal Monitor • Knowledgeable

10. What? • Every Service Contract • Not just professional services

11. How? • Monitoring tools • Vary by contract • Must be contract specific

12. When? • After contract award • As necessary to ensure contract compliance • Until contract expires

13. Why? • It’s the law!!! (O.S. 74-85.41) • Agency core value

14. Work Plan • Prepared and submitted with Requisition • Good for life of contract unless Monitor changes for any reason • Must use agency template • Must have signatures of Monitor(s) and Supervisor • Reports available by name of Monitor(s)

15. Annual Evaluation • Distributed to Program Monitor first of month in which contract expires • Most information is provided from Requisition System • Complete form and return within 30 days of contract ending date

16. Award Meeting • Program Monitor schedules with contractor after official award by DCS • Introduce agency staff • Explain agency procedures • Review contract in detail • Relay specific instructions

17. Roles of the Contract Monitor • Coordinator • Organizer • Evaluator • Mediator • Enforcer • Tracker • Troubleshooter

18. Responsibilities of the Contract Monitor • Must be familiar with program • Must understand the Statement of Work • Serve as agency liaison with contractor • Provide technical guidance to contractor • Document technical direction to contractor

19. Responsibilities of theContract Monitor Maintain file of • technical instructions issued • deliverables received • monitoring tools • summaries • correspondence

20. Responsibilities of theContract Monitor • Ensure that services received are in accordance with contract • Notify Contracts Unit of significant or potentially significant events/issues

21. Limitations Contract monitors cannot • modify stated terms of the contract • direct the contractor to start or stop work • direct the contractor to perform work not specified in the contract • approve items of cost not authorized in the contract

22. Limitations Contract monitors cannot • execute any supplemental agreement amendments • render any decisions on contractual disputes or questions of fact

23. Method Selection Monitors must be able to develop tools that will accurately monitor and document the contractor’s performance and create a comprehensive picture of their service delivery

24. Observation Record Direct Monitoring Complaint Record Follow-up Monitoring Discrepancy Report Outcome Monitoring Contractor Status Report Surveys Monitoring by Exception Summary Evaluation Scheduled Monitoring Random Monitoring Monitoring Tools

25. Qualitative (narrative) on-site visits phone calls interviews and observations written reports Quantitative (numerical) surveys checklists questionnaires spreadsheets written reports Methods of Measurement

26. Observation Record An observation record is used to document observations of contractor performance • Construction • Highway Repair • Janitorial Services

27. Direct Monitoring Direct monitoring requires daily observation and interaction between the contract monitor and the contractor • IT Projects • Construction

28. Complaint Record The complaint record is used to record and follow up on complaints received • All contracts

29. Follow-Up Monitoring Follow up monitoring is the inspection method most often used and its purpose is to answer both general and specific questions • Janitorial Services • Pest Control • Waste Management

30. Discrepancy Report A discrepancy report is used to document a condition that is leading or could lead to a breach of contract. It is prepared by the contract monitor and discussed with the contractor • Usually larger, more complex contracts

31. Outcome Monitoring Outcome monitoring is the analysis of the results of a service and is based on user-provided data on service quality • Generally, repair contracts

32. Contractor Status Report A narrative status report prepared periodically by the contractor • Usually larger, more complex contracts with many deliverables

33. Surveys Surveys usually address basic issues on the number and quality of contract outputs • Almost any contract

34. Monitoring by Exception Monitoring by exception is appropriate for services that users evaluate continuously as a matter of course • Janitorial • Supplies • Pest Control

35. Summary Evaluation The Summary Evaluation is prepared by the Contract Monitor using information received from all available sources during the evaluation period • All Contracts

36. Scheduled Monitoring Scheduled monitoring is arranged, in advance, with the contractor and the contract monitor inspects or reviews the service • Day Care Providers • Foster Care

37. Random Monitoring Random monitoring is direct or follow-up inspection of the contractor’s performance undertaken without the contractor’s advance knowledge • Day Care Providers • Food Stamp Retailers • Transportation Contracts

38. Assessing Fiscal Data • Do amounts billed equal hours of service? • Do amounts billed agree with amounts allowed in contract? • Are billing periods equal? • Do expenditures agree with the budget? • Is itreasonable?

39. Assessing Fiscal Data • Do amounts billed agree with number of clients receiving services? • Are appropriate clients receiving appropriate services? • Are services provided in accordance with contract? • Question!

40. More Specifically … “State Auditors found serious abuses. They found an Osage County youth services agency was reimbursed for about two years for a first-time offender program that apparently did not exist.”

41. More Specifically … • “Billings were not prepared in accordance…” • “Timing of billings were not in accordance…” • “Accounting records were not maintained…” • “The agency may have been billed $87,000 for undocumented and/or unreasonable costs.”

42. Guidelines • Be accurate • Document facts, not opinions • Note direct observations of actions and results • Do not use hearsay • Do not rely on memory • Maintain a detailed file of both oral and written communication with contractor

43. Guidelines • Be consistent in information gathering • Monitor all people/areas of the contract, not just those performing satisfactorily/unsatisfactorily • Monitor behavior and results that represent contract duties and responsibilities • Use the proper monitoring tool(s) • Consult other program/fiscal staff as necessary

44. Monitoring Oversight • Performed by Contracts Unit • Random • Ongoing • On-Site • Review of monitoring file and tools

45. Decrease in the quality of program/project Increased costs or loss of funds Lost contract and/or resources Lost credibility (yours/agency’s) Litigation Audits Media attention Loss of employment Criminal investigation and/or charges What Happens When a Contract is Not Monitored?