Controlling Procurements: Contract Management After the Award
Procurement gets attention up to signature and very little afterwards. The tender is run carefully, the evaluation is documented, the contract is signed, and then the document is filed and the relationship reverts to whatever the two delivery teams work out between themselves. Most supplier difficulties are created in that period, and a surprising share of them are the buyer's own doing.
Appendix X4 of the PMBOK® Guide Eighth Edition covers the procurement material, and the part after award is where a project manager's attention earns most: the contract is now a working instrument rather than a commercial exercise.
The buyer has obligations too
Contracts bind both parties. Access to sites and systems, information by dates, decisions within stated periods, client-supplied equipment, approvals of drawings and samples: each of these is an obligation, and a supplier delayed by a buyer's failure to meet one will be entitled to time, money, or both. Suppliers track these carefully, because they are the basis of a claim.
The buyer's obligations usually have no owner. The supplier has an account manager whose job is the contract; the buyer has a project manager whose job is the project, and the contract is one of forty things on their list. Making somebody explicitly responsible for the buyer's side, with the obligations written out as dated actions, removes the most common cause of contractual difficulty.
Four things to run regularly
Performance against agreed measures. Whatever the contract says will be measured, measured on the stated cadence, with the result shared. A measure everybody agreed and nobody has calculated since month two is a measure that will be disputed when it matters.
Changes, through the route the contract specifies. Instructions given informally, by email or in a meeting, are the origin of most variation disputes. The discipline is unglamorous: if it changes what the supplier has to do, it goes through the contract's change mechanism, even when both parties are comfortable.
Payment against verified work. Somebody on the buyer's side confirming that what is being invoiced was actually delivered, before it is paid. This is the control most often reduced to a rubber stamp, and it is the one that catches both honest errors and the slow drift of a time-and-materials arrangement.
Records, kept as you go. Dates, instructions, notified delays, meeting notes and the evidence behind them. Nobody wants to build a claim file and every serious contractual dispute is settled by whoever has the better record. Assembling one retrospectively takes weeks and is rarely convincing.
A managed service with nobody on the buyer's side
A broadcaster contracted a supplier to build and run part of its content delivery platform. The contract was well constructed, with service levels, a change mechanism and a schedule of obligations on both parties.
The supplier's side was managed properly. The broadcaster's side was managed by whoever was available, which meant the account meeting happened when both diaries allowed, the service reports arrived and were filed unread, and the buyer's obligations sat in a schedule nobody had converted into actions.
One obligation was to provide two encoders from the broadcaster's own stock by a stated date. The rack bay was prepared by the supplier: rails fitted, power tails coiled and tied off, a blanking panel screwed across the opening. The encoders arrived eleven weeks late, because the person who had been going to arrange them had moved to another role and nobody had inherited the task.
The supplier claimed for standing time and for the second mobilisation, which was contractually sound, and the broadcaster paid about ninety thousand pounds it need not have spent. The service levels for that period were also suspended, correctly, which meant three months of degraded performance with no remedy available.
What the broadcaster changed was small. Every contract now has a named owner on the buyer's side, and every buyer obligation is entered into the project plan as an activity with a date and a name, exactly like any other piece of work. On the next two contracts, that produced four obligations that would otherwise have been missed, each of them caught weeks in advance by an ordinary plan review.
Closing a contract properly
Final acceptance, against the criteria agreed at the start. Formal, recorded, and with any outstanding items listed with dates. Contracts that fade out rather than close leave retentions unreleased, warranties ambiguous and disputes available for months.
Record how the supplier performed. A short, factual note in a place the organisation can find it, covering what went well and what did not. Procurement teams choosing suppliers for the next project have almost no reliable information about past performance, and this is the only way that ever changes.
For a PMP® candidate, the point to hold is that contract administration is continuous work with obligations on both sides, so a scenario about a supplier claim is worth examining for what the buyer owed and when. A response that disputes the claim without the buyer's own record is arguing from a weaker position. A structured PMP exam preparation course works through situations where the supplier is performing and the buyer is causing the delay.
Take the contract governing your largest supplier and find the schedule listing what you owe them. Put each item into your plan with a date and an owner. If that schedule does not exist, or nobody can find it, you have learned something useful about the next twelve months.
Interested in going further?
The contract stops being a commercial document at signature and becomes a working instrument, and most organisations treat that moment as the end of the process. Omega's PMP® Exam Preparation works through supplier management after the award.
Contract administration sits with the procurement material in the PMBOK® Guide Eighth Edition.
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References
A245: Make or Buy? How to Decide Before Procurement Begins
A246: Procurement Strategy: Decide How You Will Buy Before You Go to Market
A247: RFP vs RFQ vs IFB vs ITT: Which Procurement Document Should You Use?
A248: Choosing a Supplier: Cheapest Is Not the Same as Best
A249: Fixed-Price vs Cost-Reimbursable vs Time-and-Materials Contracts
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