Key Attributes of Contract Administration
Here are some key attributes of contract administration to consider when shoring up your contract administration program.
1. Legal Compliance: Ensure that all bids (solicitations) and contracts comply with federal, state, and local laws, as well as school district governing board policies and procedures. In some instances, contracts may require review by legal counsel to ensure compliance. Don’t be penny-wise and pound-foolish. Nominal savings in legal fees could easily be outweighed by exposure to inefficient and non-compliant contracts.
2. Procurement Process: Follow the proper procurement process for soliciting bids or proposals, evaluating responses, and awarding contracts. The process should be transparent, fair, and documented. The three most important things in school district procurement are documentation, documentation, and documentation.
Those district employees most closely associated with the contract should be administering the contract in conjunction with the business office.
3. Contract Monitoring: Monitor contracts to ensure that all parties are meeting their obligations. This includes tracking deliverables, timelines, payments, and performance metrics. Monitoring is not expediting. Monitoring contracts is proactive; expediting is reactive and corrective. Every contract should have a designated contract administrator to oversee its execution. The contract administrator should be the district lead most closely associated with the contract.
4. Budget Management: Keep track of contract costs and ensure that they align with the school district's budget. Monitor any changes in scope or cost and follow appropriate procedures for modifications. Ask questions and seek answers.
5. Record Keeping: Maintain accurate records of all contracts, including the original agreement, amendments, correspondence, and performance evaluations. This documentation is important to resolve any disputes that may arise. You also need the paper for audit purposes.
6. Communication: This is the most critical aspect of contract administration. Establish clear lines of communication between the district and vendors to address any issues that may arise during the contract period. Regular communications can help prevent misunderstandings and ensure smooth contract implementation.
7. Training and Resources: Provide training to staff involved in contract administration to ensure they understand their roles and responsibilities. Access to resources such as contract templates, guidelines, and best practices can also help streamline the process.
The family of public procurement officials throughout the country is an excellent resource that can be tapped, including associations and groups like ASBO International, your local ASBO affiliate, the National Institute of Governmental Purchasing, and your local NIGP chapter. These groups are not only resources for school districts but also vendors.
8. Performance Evaluation: Evaluate vendor performance against contract requirements and key performance indicators. Use this information to inform future contract decisions and improve the overall procurement process. Develop or mimic a vendor performance report and encourage and incentivize your end users to actually use it.
9. Risk Management: Do your best to identify and mitigate potential risks associated with contracts, such as non-performance, delays, or cost overruns. Develop contingency plans to address any unexpected issues that may arise. Remember, even a low-dollar contract could expose a school district to hundreds of thousands of dollars in claims.
10. Compliance Monitoring: Monitor compliance with contract terms and conditions, including reporting requirements, insurance coverage, and regulatory obligations. Take appropriate action if any violations are identified. Again, a contract administrator should be assigned to each contract.
The procurement or business department cannot be expected to directly monitor the myriad contracts it awards throughout the year. Those district employees most closely associated with the contract should be administering the contract in conjunction with the business office.
By implementing these tips and refining best practices, school districts can effectively manage their contracts and ensure they achieve their intended outcomes while remaining compliant with relevant laws and regulations.
I hope this little insight into contract administration gives you the foundation of best practices you need to make all your procurement dreams come true.