5 Contract Management

This stage includes all activities following award of the contract to its closeout. It involves the formal governance of the contract and changes to contract documentation including:

• maintaining documentation relating to the contract
• regulating change control
• monitoring charges and costs
• checking invoices and authorising payment
• reviewing reports and requesting information
• asset management.

Owners need to provide necessary resources to successfully manage the agreed-to contract. The role of oversight is to ensure that the contractor is safely executing the project to the necessary quality standards, at the negotiated cost, and on the agreed to schedule. This includes managing owner commitments such as ensuring sufficient resources and priority is applied to owner reviews of supplier deliverables.

Contract management is an often overlooked area for inexperienced organizations. If not taken seriously, contractors may utilize unclear contract terms, precedents set early in the contract’s life, or unclear responsibilities between separately negotiated contracts, to make claims for unexpected “extras”, “delays”, “unanticipated conditions” or other charges. Owners that do not take sufficient care in contract management can find themselves liable for many of these claims.