ANAO - Developing and Managing Contracts

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6.2. Identify and manage risks

In the transition to another contractual arrangement, risks can include the failure to agree final payment details.

The risks that may arise during contract closure are likely to vary in accordance with the way the contract is ended.

When a contract ends because all obligations have been fulfilled, risks to successful closure include:

the failure to return all relevant documents, materials and records; and
non-submission and payment, where applicable, of all invoices.

In the transition to another contractual arrangement, risks can include:

Sources of risk	Examples of risks
Contract materials, information and records	Failure to return all required materials, information and records within agreed timeframes and/or in the required format
Payment	Failure to agree the final payment details Submission by contractor of an invoice for unforeseen additional costs
Transition arrangements	Failure to appropriately manage the transition-out by the contractor Not undertaking arrangements for a new procurement early enough in the procurement cycle Not managing the process of re-tendering in line with probity requirements, particularly where the existing contractor is re-tendering Disruption to the provision of goods and services Not addressing performance problems with an existing contractor who is re-engaged Not reviewing value for money when contracts are extended

The Actions and Responsibilities Matrix at the end of this part outlines a typical sequence of steps, the key stakeholders involved and documents produced in ending the contract.

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