5.7. Manage contract start-up

After a contract has been awarded there are a number of matters that should be addressed to provide the foundation for successful contract management. An early step is to confirm that sufficient resources and senior management support (which should have been identified before contract award) are available to manage the contract.

It is equally important to understand both the contract provisions and contractual relationships at the outset. Where the contract manager has been involved in earlier procurement phases, the manager will already have knowledge of the issues relevant to implementation. For example, if the manager has been involved in drafting the contract they are likely to have an understanding of its provisions.

A checklist to assist with understanding the contract is at the end of this part.

Where the manager’s or team’s involvement is commencing at the contract start-up phase there are a number of activities that will need to be undertaken.

In order to implement the contract, and to manage it, the contract manager or team must ensure that appropriate delegations and authorisations exist in line with legislative or agency requirements. To determine whether authorisations and delegations are appropriate:

• identify the roles and responsibilities of contract management staff, particularly those actions that are undertaken on behalf of the acquiring entity;
• identify the source of the authority or delegation required in legislation or agency instructions;
• determine the scope of the authority needed and whether existing arrangements are sufficient; and
• establish arrangements to vary the authorisations and delegations when circumstances change.

Management of unresolved issues

In many instances, not all issues are resolved at the time of contract signature. For example, aspects of the contract may be subject to conditions of licences or third party approvals or the outcome of a review of the transition phase. These issues (which should have been documented in earlier phases of the procurement cycle) need to be addressed in a timely way during contract start-up. Issues that are not properly dealt with at the appropriate time can create problems at a later stage.

In situations where there are issues that have not been fully resolved at contract signature, the contract manager should follow these up and record the details of how these issues were resolved.

The detailed review of the contract, including the contract management plan, at the contract start-up may also identify issues that require clarification or elaboration in the contract. It is important to address any such issues promptly. This may require a contract variation or exchange of correspondence, and updating of the contract management plan. Contract variations are discussed later in this part.

The following case study is an example of how an entity addressed the start of a new contract.

Transition phase

For some contractual arrangements there will be a transition phase. Transition refers to the changeover from one contractor to another, from one contractual arrangement to another, or the continuation of an existing arrangement on a different basis. The duration of this phase can range from a few days to several months.^[98] The objectives of this phase are to:

• ensure a smooth transition to the contractor by minimising the risk of a reduction or loss of services and the impact on end-users and other stakeholders;
• establish relationships and systems and procedures that will be used during the life of the contract; and
• complete the transfer of information and/or assets to the contractor.

For straightforward contracts there may be a number of one-off tasks that need to be appropriately planned and resourced. In complex contractual arrangements the transition phase may require a detailed transition-in strategy or some other formal documentation to ensure all relevant matters are considered and addressed.^[99] The way the acquiring entity manages the transition phase will generally be an indication to the contractor about the way the whole contract will be managed. If, for example, the entity adopts a lenient approach in respect of the non-achievement of transition targets, the contractor may take this as a signal of how the entity will deal with underperformance generally.

Post transition review

At the end of the transition phase, it is important that a formal assessment be undertaken of overall contract performance. The extent and method adopted will depend on the complexity of contract deliverables and how important the results of the transition are to the success of the contract over its life. For example, where the transition is being used to finalise details of contract deliverables and performance measures, the outcome of the transition will dictate the final form of the contract and how it will operate in practice.

This phase should also be used to review the acquiring entity’s contract management arrangements, including resource requirements.

 

 

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