IJIS Factor Blog   |   Contact Us   |   Sign In   |   JOIN US!
IJIS Procurement Innovation Blog
Blog Home All Blogs
Search all posts for:   


View all (10) posts »

Contract Oversight and Management

Posted By Robert Shumate, Thursday, May 14, 2015

This is the last of an eight-part series on procurement practices in information technology. This series is authored by Bob Shumate, a Member Emeritus of the IJIS Institute and the chair of the IJIS Institute’s Procurement Innovation Task Force. The material in these articles covers the findings of the Procurement Innovation Advisory Committee and offers some insight into the problems and solutions in procurement evident in today’s information technology markets.

There is a common misconception that, once the solution provider has been selected, the work of the procurement governance group is complete and that they have no further responsibility for oversight of the project. Best practices suggest that better project results are realized when the governance group remains involved throughout the contract performance period. Consider that this group has nurtured the effort from its earliest inception through the final signing of the contractual agreement and is aware of, and understands, all of the details of how the procurement was handled and the reason why certain requirements were included and other eliminated. If the group has followed suggested best practices, the buyer’s project manager will have been involved as part of the governance group from the outset and will become the principal point of contact with the contractor. The project manager acts as the intermediary between governance group and the contractor and manages the day-to-day interactions between the buyer and the contractor.

The support of the procurement group throughout the project is essential and the group should act as a resource for final resolution of disagreements that may arise during the project performance period. The group should also conduct periodic reviews of the project progress with both the Buyers project manager and the contractor’s project manager to remain familiar with progress and to obtain early awareness of any pending problems.

This is not intended as a dissertation on project management techniques and is directed solely toward the oversight role that the Procurement Governance group should assume during the performance period of the contract. Change is part of any IT effort, and few projects will reach completion without some type of change. While the day-to-day oversight of the project progress will be in the hands of the buyer’s project manager, there will be numerous situations throughout the life of an IT project where situations will arise that need to be reviewed and acted upon by the Governance Group.

Change Orders There will be change as the project progresses. Conditions will arise on both the buyer’s and provider’s side that require deviation from the original work plan. As progress on the project continues, better or different ways to deal with a process will become apparent, requiring a change in the work specification that may require either additional or fewer funds. The buyer may discover that needed data or personnel may not be available as planned, requiring a change in schedule. While routine changes may be approved by the buyer’s project manager, changes that materially affect the budget or the completion schedule should be reviewed, negotiated, and approved by the Governance group.

Dispute Resolution Disagreements will arise throughout the project over the meaning of a work statement, responsibility for a delay, or the acceptance of an interim work product, just to name a few. While an amicable and professional relationship between the buyer’s project manager and the contractor’s project manager can frequently lead to a satisfactory resolution, inevitably, there will be disagreements that are unresolved. The Governance group should act as the first line of arbitration, listening to both sides of the dispute and seeking an equitable resolution of the disagreement.

Task Acceptance Almost all projects include a series of work tasks that have specific acceptance criteria defined. Usually such acceptance is directly related to payment to the contractor for the work performed. The buyer’s project manager is responsible for making the recommendation for acceptance but the Governance group should sign off on the acceptance or resolve any disagreement between the buyer’s and contractor’s project manager regarding the status of the task to be accepted.

Scope Changes Routine change management has been discussed above, but, occasionally as the work progresses, it becomes apparent that there needs to be an adjustment in the scope of the work to meet needs that were not apparent prior to the project commencement. This may or may not involve additional budgetary requirements but may require work statement changes, contract modifications, and/or extension/contraction of the schedule.

Final Acceptance The final completion of a project and the turnover of the product is the final step in the process that began with the procurement planning stage. Based upon the recommendations of the project manager the Governance group will act as the final sign off authority accepting the product being delivered. Even in those cases where local legal requirements specify an explicit individual who has the legal acceptance authority the Governance group should review and recommend whether acceptance should take place.

The Governance group has an oversight responsibility to monitor project performance and should be established with this requirement in mind and given the necessary authority to exercise this obligation.

Comments welcome on this topic! Thank you for reading our special series in procurement practices in information technology.

For further reading: http://www.ijis.org/?page=Procurement_Resource

This post has not been tagged.

Share |
Permalink | Comments (0)
Membership Management Software Powered by YourMembership  ::  Legal