The contract manager is pivotal to the success of a project. The candidate must establish systems of control, co-ordination and communication. The manager should also maintain competition within the marketplace ensuring that cartel arrangements are not used to determine service providers.
For those who have read my articles on the tendering process, it will be clear that contract management is not simply a post contract award activity.

To be effective, contract management must operate from inception of a requirement to the completion of the contract term. It must be able to influence the planning of the contracting activity so that the contract will contain the mechanisms and demonstrate the will of both parties to maintain an effective service. It must also be properly managed to cope with difficulties, conflict and change in order to secure optimum value for money.

This is not simply a question of taking the lowest price, but of assessing the right balance of a range of factors, including price and time, but which should principally focus on service achievement, quality and meeting operational targets. These incorporate confidence and the relationship between the parties, which must be negotiated constantly and which are key aims of the process of contract management. Value for money must be judged over the full term of the contract.

The nature of contract management and the roles and responsibilities of those involved undergo a shift at the time the contract is awarded. The process generally moves from design to implementation and the buyer's position changes from one of almost total control to that of sharing control with the contractor.

It is in the best interests of both parties throughout the contract term that the pre-award stage is used to build into the contract an infrastructure of effective monitoring, control and management procedures.

Process and value
Monitoring and control are expressions that spring to mind when people think about contract management. If one is to get to grips with the principles of contract management, however, it is vital to distinguish clearly between monitoring, control and management as terms. The best way to do this is to consider how they each add value to the contract process.

Monitoring is an essential but largely passive part of contract management; it is effectively the process of checking and recording what the contractor has done and is doing.

Control is the next step which ensures that what is monitored is what the contract calls for. If the contractor is not meeting that requirement, control mechanisms are operated to remedy the fault.

Monitoring and control therefore add progressive value to the contract process, but concentrate largely on the past and the present.

Management of the contract, however, takes what has happened, what is happening and interprets and uses them to manage the future of the contract. The manager must then ensure that all members of the contract team are fully informed of events and the necessary future direction.

The contract manager
Contract management will not function without the contract manager and to understand the basis of roles and responsibilities one first needs to examine the role. Who is the contract manager? What skills are needed? What training should be given to facilitate development in the role and achievement of its objectives? The contract manager can be likened to the hub of a wheel; the point at which all the spokes meet to convey the stresses and needs of the activities on the rim. This then transmits to the rim along the same spokes the direction and support emanating from the gears being selected at the centre to cope with the demands identified.

Who the contract manager is in organisational terms is of little real relevance as long as the candidate:

  • is appointed at the right time
  • possesses and/or has access to the requisite skills
  • receives adequate training
  • has the necessary authority
The contract manager's role
  • Establish systems of control, co-ordination and communication: The contract manager must ensure that all parties to the contract have and understand an effective system of contractual control. This has to be prepared at the earliest stage possible, so that it can be incorporated into the tender documentation and everyone in the organisation is familiar with it. The contract manager needs to liaise closely with any appointed project manager to ensure that the contractual control corresponds to the project control system being used.

  • Co-ordinate knowledge, information and experience: The control system established for the contract must provide mechanisms for the co-ordination of knowledge, information and experience and their dissemination to the other members of the procurement team. The contract manager's role is not simply to record, co-ordinate and communicate what has happened or is happening, but also to use that information for planning ahead and anticipating operational and contractual developments.

  • Promote the efficient use of resources: The contract manager must assess whether external and internal resources are being used efficiently and cost effectively, by maintaining direct contact with the internal and external members of the procurement team, i.e. the user, the related internal departments such as accounts, the supplier and any consultants appointed under contract to assist the organisation.

  • Prevent domination of service providers: The contract manager must do everything to maintain, and where necessary create, competition in the market. In some cases the number of service providers capable of providing the service required will be small and they will compete across the marketplace for a range of contracts. This competition must be kept real and not allowed to fall into disrepute as cartel arrangements, where contractors take the lead in determining who wins the contracts.

    It should be clear that the role of the contract manager is to keep on top of the management of the contract and ensure that the right things are done at the right times. Like many aspects of life this is more easily said than achieved.

    In subsequent articles I will outline fundamentally simple and practical approaches that facilitate this achievement.