7  Contract management

The construction and implementation phases, when the private party is making its major investment, are critical to project success. While the bidding process is very important, the conversion of the contract into delivery of outputs is essential to meeting the overall project objectives.

Contract management requires particular skills which need to be procured before the contract is executed. Timing may be critical, as both the public and government are looking forward to delivery of the service outputs from new infrastructure.

For risk to be managed effectively, the foundations for contract management must be incorporated into the RFP and the draft contract provided to bidders, then maintained through further development and finalisation of the contract. This ensures that:

•  a sound contractual basis for effective contract management is incorporated in the contract;

•  there is adequate knowledge transfer from the procurement team to the contract management team; and

•  the contract management strategy for the project is in place as soon as practical after the contract is executed.

Figure 7‑1:  Three steps for developing and implementing the contract management strategy

Further details on contract management are provided in Appendix H.