Contract Management Private Sector seminar April 2018 Copyright World Bank 2017 Contract Management Introduction World Bank regards contract management as systematic and efficient planning execution monitoring and evaluation ID: 731772
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Slide1
2016 Procurement Framework
Contract Management
Private Sector seminar
April 2018
Copyright World Bank 2017 Slide2
Contract Management - Introduction
World Bank regards contract management as:systematic and efficient planning, execution, monitoring, and evaluation of contractsan approach to optimize performance
an integral part managing risks a method ensure that both parties fulfill their contractual obligations
a process to deliver the ultimate goal of achieving Value for Money (VfM) a key driver to achieving results on the groundSlide3
Contract Management- Procurement Framework
New Procurement Framework recognizes that effective contract management:
is part of the Procurement Processneeds planning thus should be considered at the Project Procurement Strategy Document stage
should be considered as part of the overall Procurement Approachis applicable to goods, services, works and non-consulting servicesis an essential part of a Fit for Purpose Procurement Approachrequires Borrower
capacitySlide4
Contract Management- Procurement Framework
New Procurement Framework recognizes that effective contract management:
is integral and linked to risk identification, mitigation and management across all aspects of the contract e.g. Environment, Social, Health and Safety
requires KPIs need to be built into contractincludes a broad range of aspects including contract variations (both commercial and technical)achieves improved VfM and improved project outcomes
Ability to look at end-to-end cycle
Three key implementation phases:
plan contract
execute contract
manage contract
Good Contract Management Practice- Areas of Intervention
People (‘champions’, administration, disclosure)
Performance (reviews, meetings, evaluation, satisfaction)
Process (streamlining, templates, standard procedures)
Policy (standards, monitoring, interpretations)
Technology (obligation, compliance, web-based tools and apps, advance notifications
) Slide5
Contract Management – Borrower’s Role
Contract management is the responsibility of the BorrowerProportionality is key
Contract plans are developed during contract creationWB Guidance to Borrowers suggest that contract management priorities are:
tracking and monitoring cost, time, quality and deliverables being clear on roles and responsibilities of both Borrower and supplier/contractor/consultant managing relationships with the supplier/contractor/consultant and key stakeholders managing payments in accordance with agreed termsbeing proactive throughout the contract to anticipate problems and issues before they arisemanaging problems and issues as they arise, quickly, effectively, fairly, and in a transparent mannerSlide6
Contract Management – Bank’s Role
Fiduciary role - ensure funds are used for the purpose intended
Requiring Borrowers to apply Bank’s standard forms of contracts (international good practice) for international contracts
Prior review of major contractsPost review, including contract execution of smaller contracts on sample basis Supervision
Prior review of material amendments to major contracts
Requiring
speedy resolution of disputes
through alternative dispute resolution such as dispute experts/dispute boards and international commercial arbitration
Exercising Bank’s audit and inspection right when needed
End of project evaluationSlide7
What can industry do to help?
Pre-market and pre-bid engagement – discuss contract management requirements
Contract Award - work with Borrowers to ensure contract management plans are agreed
and in place before contract awardContract Management Governance - be clear on roles and responsibilities and hold Borrowers to accountContract and Project Delivery - Work with
all parties to a project/contract who are involved in contract management e.g. Borrower, supervising engineer, specialists, etc.Slide8
What can industry do to help?
Contract Administration – timely submission
of contract variations, requested information for contract monitoring and contract administrationDispute Resolution - Use
escalation and dispute resolution mechanisms defined in the contract in a proactive waySlide9
Questions and Discussion
What are the issues that hold back industry in using effective contract management approaches on Bank financed Projects?