Government procurement teams understand their procedures, processes, and roles when conducting a solicitation or utilizing an already awarded contract. Suppliers understand their products, services, and industry trends through their experience in serving public institutions. Through the life of a contract, a relationship is created between the two parties.
This contractual relationship provides the opportunity to develop a partnership that can bring greater value to the organization’s mission and goals. Managing the awarded contract effectively as a partner with your vendors can bring the full value of their experience, knowledge, and resources to the actual delivered product or service.
Once a contract has been awarded, clear and consistent communication with the vendor is key to the success of that contract. During the solicitation process, conversations are limited and focused. However, once the contract is awarded, the two parties can have more open communications. Regular interactions, status reports, site visits, and periodic inspections are all important components of good contract management. Communication is critical, although the level and extent of those exchanges can be determined on a contract-by-contract basis.
Upon award of a multi-year contract, a kick-off meeting should be held with the awarded vendor to discuss in detail the service level expectations, delivery times, warranties, and possible consequences of unmet contractual requirements. These meetings work best when key contact persons from both the contracting agency and the supplier are involved, not just management or representatives who were involved in the initial solicitation. This is important to ensure expectations are set and questions are answered as the roll out begins. Those key contact persons can then communicate those expectations back to their organizations and to appropriate personnel.
Through the life of the contract, there are important timelines that may warrant additional communications, such as annual option year renewals, requests for documentation or insurance certificates, or when project issues arise. In addition, there should be periodic spot checks or audits. These can be done by reconciling invoices against contract pricing, inspecting quality and quantity of product deliveries, and surveying customer departments’ satisfaction levels.
For larger purchases, service contracts, or construction projects, the monetary commitment and potential risk or liability make it even more imperative that the purchasing entity maintains contract compliance. For example, inspecting an asset in its final assembly phase can verify the quality of workmanship. For contracts with a labor component, there should be checks for compliance with payroll requirements, reporting of subcontractors, and safety inspections, particularly for construction projects.
Violations or non-compliance with the scope of work or specifications can quickly be noted and corrected. Change orders may also have to be reviewed and addressed.
The procurement team or its designated contract manager should be responsible for monitoring performance of, and compliance with, the contract by both parties and for taking appropriate action.
Any infractions, anomalies, or contract non-compliance issues should be documented in writing. Recording the incident, time and date, parties involved, and expected resolution should be included in that documentation, and the agency should follow up at or before the deadline for resolution.
If problems continue, further discussions and documentation should result. Ultimately, the goal is to bring the supplier back into compliance with the contract. However, if corrections are not made or service doesn’t improve, then the entity should pursue its options. This can include legal recourse, termination of the contract, or bringing in another supplier to provide the services. The contract should have terms and conditions related to termination, as well as any liability or claim assignments.
It's important to mention that sometimes the supplier is not at fault. For example, a user department may complain that cleaning isn’t being conducted and trash is not being removed in a particular section of a building. However, a more in-depth conversation with the supplier indicates that the user department has changed the security access codes, and, despite multiple requests, they have not provided the new codes to the contracted janitorial team. This would be an instance where the entity is at fault, not the supplier. Procurement should make expectations known on both sides of the contract.
Procurement needs suppliers to provide the goods and services required for their operations and to meet their mission. As a result, they should strive to create good working relationships with their awarded vendors and contractors and consider them partners with their organization.