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<p>Contract administration is a term used to describe the functions that are performed after the contracting parties have signed the contract.</p>
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<p>As a precise term, contract administration refers to those activities that take place after contract award and can include a plethora of activities ranging from routine to unusual.</p>
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<p>It requires the contract manager to remain focused on the program goals and objectives. Good contract administration fails when program goals and objectives are not met.</p>
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<p>Contract administration includes the development of a contract administration plan, performance monitoring, contract closeout, and analysis.</p>
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<p>Contract administration activities include payment, monitoring of progress, inspection and acceptance, quality assurance, monitoring and surveillance, modification, negotiation, contract closeout, and many others.</p>
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<h2 class="wp-block-heading"><strong>Purpose of contract administration</strong></h2>
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<p>Contract administration focus on the achievement of stated goals and objectives that fall within the framework of the negotiated contract.</p>
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<p>Contract administration protects the rights of the parties and ensures that the obligations of the parties are met.</p>
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<p>From the public sector perspective, contract administration is concerned with the wise expenditure of public funds and the design and application of a decision-making process, which results in outcomes that are in the best interests of the citizens it serves.</p>
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<h2 class="wp-block-heading"><strong>Strategic Contribution</strong></h2>
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<p>Contract administration requires the effective and efficient management of executed contract agreements.</p>
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<p>Contracts are created to meet the validated requirements of public organizations. So each contract makes some contribution to the operational effectiveness of any organization. Contractual arrangements are mission-oriented so contribute to the success of the mission of the organization</p>
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<h2 class="wp-block-heading"><strong>Typical Contract Administration Problems</strong></h2>
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<p>1. Wrong or unsatisfactory product is delivered.</p>
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<p>2. Delay in delivery or completion.</p>
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<p>3. Dispute over the definition of acceptance.</p>
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<p>4. Change orders.</p>
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<p>5. Personality conflicts between the contractor and the agency representatives.</p>
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<p>6. Limited or no replacement sources of supply.</p>
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<p>7. Poor performance.</p>
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<p>8. High risk of failure.</p>
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<p>9. Use of subcontracts.</p>
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<p>10. High costs.</p>
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<p>To effectively manage a contract, the procurement department should anticipate which of these contract administration problems will most likely be encountered and then develop specifications, contract clauses, and a contract-monitoring plan to avoid or manage the problems.</p>
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<h2 class="wp-block-heading"><strong>The Benefits of Good Contract Administration</strong></h2>
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<p>1. <strong>Effective Control</strong> - ensuring that both parties know their obligations and implementing a contract control system that reflects the performance requirements of the contract and provides mechanisms for the coordination and dissemination of information.</p>
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<p>2. <strong>Performance to the required standard</strong> - Full use should be made of a contractor’s own management information and performance measurement system, with the contractor reporting progress through the agreed procedure.</p>
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<p>3. <strong>Compliance with contract conditions</strong> - Managing the contract conditions will help to ensure that they are met; if they are not met, they provide remedies to be applied properly and promptly.</p>
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<p>4. <strong>Clear and documented records</strong> – These are essential in the event of invoking default procedures or seeking correction of failures to perform.</p>
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<p>5. <strong>Management of change</strong> - It is the contract administrator’s responsibility to define appropriate change control procedures which enable him/her to anticipate, manage and control changes to requirements and/or costs.</p>
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