Contract Administration Workbook Virtual - 4 Hrs

Government
Procuremen
t Services
Contract
Administration
© Copyright 2021
Government Procurement Services
-All Rights Reserved-

Agenda
Contract Administration – 4 Hr.
TOPIC PAGE #
Overview & Best Practices

Contract Administration Overview 6
Roles and Responsibilities 8
Best Practices 9
On-Going Maintenance
The Contract Administration File 12
Insurance 12
Financial 13
Common Issues 13
Vendor Performance Monitoring and Documentation

Vendor Performance Monitoring 16
Monitoring Methods 19
Change Management 31
Reference Materials
Contract Administration Plan Example 39
Contract Administration File Example 48
Invoice Checklist Examples 50
Contract Monitoring Checklist Example 52
Monitoring Follow Up Examples 53
GPS TRAINING 2021
3
Contract Administration
PRESENTED BY: JANET HASTY, CPPO, CTPM GOVERNMENT PROCUREMENT S
Virtual
Class
Etiquette  Workbook
 Participate!!!! Use chat or  Class Hours
the “raise your hand” button
for questions or comments.  Certificates and Survey
 Keep microphone muted  Wear pants!
 Keep webcam on  Let’s get started!
 Rename yourself, if
needed. Click on the
“more” button.
 If you experience technical
issues, leave the meeting
and rejoin thru the link.
© GPS Training 2021 4

Instructor – Janet Hasty CPPO, CTPM
30 years in State of Texas procurement
Texas Department of Transportation
Health Department
Texas Building & Procurement Commission
Texas Parks and Wildlife
Owner, Government Procurement Services (2007)
Bachelor’s in Public Administration, St. Edwards University
Master of Public Affairs, University of Texas, LBJ School of Public Affairs
Class Objectives
Define roles and responsibilities for contract administration
Learn contract administration activities
Understand the various contract monitoring methods
Examine contract documents for monitoring activities
Learn how to manage change orders and disputes

1. Overview & Best Practices
2. On‐Going Maintenance
3. Vendor Performance Monitoring and

Documentation
Overview &
Best Practices

Definition:
A subset of Contract Management, which includes all monitoring and administrative
Contract
Administration
Effective Contract Administration Presumes Earlier Steps in

Risk was assessed during the planning and specification development stage.
Vendor was selected competently.
Appropriate terms and conditions were included in the contract.
Appropriate performance measures and deliverables were selected for the contract.

Roles and Responsibilities –
Contract
Purchaser
Manager
Maintains contact with Contract Manager on vendor performance
Performs administrative,
fiscal and vendor performance monitoring activities.
Maintains contract documentation and communicates w/ Purchaser for effective administration

Executes changes
Provides consultation on dispute resolution
Contract Manager Responsibilities

Once the contract is awarded, the contract manager has ownership of the contract. Th
Monitor vendor activity and performance.
Identify potential problems and solutions.
Maintain appropriate documentation.
Meet with the vendor on a regular basis to review performance.
Verify accuracy of invoices and authorize payments consistent with contract terms.
Monitor the budget and accounting processes to ensure sufficient funds are available to pay

Contract Managers Should NOT:
Request vendor to perform outside of the scope of work.
Issue instructions to a vendor to start or stop work (except in an emergency situation) with
Make commitments or promises to vendors outside of the contract.
Deviate from or waive terms and conditions.
Change the contract term.
Contract Administration Best Practices

While not all contracts are monitored using the same components, a number of the co
Employees trained in contract administration; including position authority and responsibility
Clearly communicated expectations to vendors through a detailed statement of work, perfor

Contract Administration Best Practices (Continued
A fully developed Contract Administration Plan.
Payments that are linked to satisfactory performance.
Regularly conducted compliance reviews.
Dispute resolution procedures to ensure disputes are resolved correctly and prompt
Anticipate evolving business needs. An entity’s needs at contract signing won’t nece
See copy of a Contract Administration Plan in Reference Section
Contract Administration Best Practices (Continued)

Use a Contract Management System or automate as much as possible.
The sheer volume of contracts can be challenging and can lead to bottlenecks, forgotten mile
A contract management system easily tracks changes and approvals. It also provides automa

Unsuccessful Contract Administration
Reasons why organizations fail to manage contracts successfully:
Poorly drafted contracts, especially in the area of evaluating vendor performance.
Failure to identify the risk/level of review necessary for each vendor.
Inadequate resources are assigned to contract management.
Perception of oversight as a responsibility to develop a partnership rather than enforce contract provisions
Failure to conduct follow‐up reviews to ensure that correction action was taken.
On‐Going Maintenance

Contract Maintenance:
The Contract Administration File
Managing all documents related to the contract is critical for effective contract admi
These documents provide the basis for all contract administration activities.
Should there be problems or issues; specific, accurate, and dated documentation is v
See sample Contract Administration File in Reference Section
Insurance
Vendor cannot begin work until proof of insurance is received by the entity.
Track to ensure insurance is effective throughout the term of the contract.
Insurance should be checked at renewal to ensure it is up‐to‐date.

Financial
Manage contract costs/budget
Total contract amount vs. budgeted amount
What is the payment type (firm fixed, progress, etc.)
Unit of measure (hourly, deliverable, lump sum, etc.)
Review and approve invoices

The vendor is billing only for goods or services received and accepted by the entity.
The invoice is correct and complies with the terms and conditions of the contract
Total payments do not exceed the contract amount.
See Sample Invoice Checklist in Reference Section
Contract Administration:
Common Issues
Reluctance to hold vendors accountable.
Failure to maintain a professional relationship with the vendor. Contract manag
Assume the accounts payable staff is “auditing” invoices.

Contract Administration: Common Issues
Failure to give proper and timely notice (both parties).
Entity: notice of an issue, change approvals, etc.
Vendor: notice of delays, changes, etc.
Proceeding with changed work without proper authorization or paperwork.
Failing to account separately for the cost and time of extra work.
Revise schedule for extra work.
Allocate the time and costs to existing activities and accounts.
Contract Administration:
Common Issues
Failure to speak with the appropriate vendor contact (e.g. subcontractor or supplier).
Failure to review or verify invoices; too dependent on vendor self‐report.
Failure to review or approve deliverables in writing.
Failure to document contract administration activities.

Group Discussion Time!!!
Subject: Common Contract

Administration Issues
Vendor Performance Monitoring and Documentation

Vendor Performance Monitoring
The contract manager monitors the contract to ensure the vendor is performing all d
Effective Vendor Performance Monitoring Requires:

Critical areas of performance are identified.
Both parties agree on what is to be measured and the methods used for measuring.
Performance is documented for future reference.
Monitoring strategies and measurement are regularly reviewed to ensure continued r

Vendor Performance Monitoring
What do you monitor?
Review all contract documents.
Extract from those documents the performance requirements to be monitored.

Performance measures, milestones, deliverables
Service level agreements
Prioritize performance requirements for monitoring by risk level.
Vendor Performance Terminology

Deliverable – a measurable and tangible outcome of the project [e.g., a report, custom softw
Milestone – checkpoints throughout the contract. They identify when one or multiple group

Vendor Performance Terminology
Is this a deliverable or a milestone?
You are building a house and the inspector just

completed an inspection.
Vendor Performance
Terminology
Service Level Agreement ‐ an agreement between a governmental entity and a vendor that d
Performance Measures – tools used to measure performance and quantitatively evaluate pro

Video: How to Develop Key Performance Indicato
httpww.y
Can you think of any performance measures that you have used?
Did you find them useful?
Monitoring Methods
Monitoring methods are dependent upon the vendor requirements and the type and comple
Desk Reviews
Site Visits
Third Party Monitoring
Enhanced Monitoring
Customer Satisfaction Surveys
Quarterly Performance Reviews
Inspection and Testing

Poll: Monitoring Methods
Monitoring Methods:
Desk Reviews
Desk Reviews are examination of reports submitted by the vendor to the government
Various reports may be required and should be tailored to the contract requirements:
Status Reports
Activity Reports
Progress Reports
Expenditure Document Review

Monitoring Methods:
Site Visits
Site visits are used to verify actual performance against scheduled or reported perfo
Full Scope Visits are generally scheduled visits to monitor contract compliance and vendor
Limited Scope Visits are typically used for problem resolution found as a result of problem
Monitoring Methods:
Site Visits
Use a checklist when conducting site visits.
Checklist should include the contract compliance requirements.
Develop a checklist template which includes standard items for all site visits; but then tailor the tem
At the completion of the site visit, prepare a site monitoring report that documents the site visit find

Corrective Action Plans
A corrective action plan is a set of actions to correct an issue, problem, non‐complian
The plan must:
Address the identified deficiency
Clearly state the desired outcome
Establish a time frame for the vendor t demonstrate improved performance.
Monitoring Methods:
Site Visits
Most effective when based on a specific methodology or a checklist of review tasks.
On‐site monitoring is not necessary for all contracts. Due to their time‐consuming nature, site visits
For example, a site visit would be unnecessary for a consultant hired to assist with an entity’s strateg

Monitoring Methods: Third‐Party Monitoring
In some cases, contract monitoring is done by a third‐ party. This is also known as “indepen
This is common in building construction where an architectural firm monitors the progress
Third‐party monitoring could also be through testing of products to ensure independent ve
Monitoring Methods:
Enhanced Monitoring
Enhanced monitoring is usually associated with high dollar and high risk contracts and includ
Enhanced monitoring methods may include:

Increased frequency of on‐site visits
Additional vendor meetings
Additional documentation requirements

Monitoring Methods:
Customer Satisfaction Surveys
Used for both internal and external customers to survey about vendor perform
Web‐based survey tools can be used to collect and analyze customer survey d
Monitoring Methods:
Quarterly Performance Reviews
Opportunity to address and resolve issues or used as a preventive measure to ma
All meetings should be documented and notes/minutes circulated to confirm dis

Monitoring Methods:
Inspection and Testing
Goods and/or services must be inspected upon receipt to ensure they comply w
Testing may be necessary for some goods. Samples are submitted by the vendo
Which Type of Monitoring to Use?

The components used to monitor a contract are dependent on many factors, especially the c
The monitoring component should be adequate for the contract factors.
For example, it might not be useful to conduct a customer satisfaction survey for a $20,000 a

Monitoring Methods Exercise
Vendor Performance
Monitoring: Root Cause Analysis
Often, noncompliance issues are identified, but we don’t look at the “root cause” of th
Instead of just “putting out fires”, find a way to prevent them!
A simple way to get to the root cause is to ask why the issue happened. Then for each

Many Late Missing
Symptoms Revisions Deliveries Deadlines
Invoice
Insufficient Errors
Progress
Communication Issues
Unclear
Training Insufficient Specifications
Insufficient or the wrong type Processes
Root Schedules Automated

Expectations are vague Process Needed
Causes
don’t match contract
Vendor Performance
Monitoring: Root Cause Analysis
Problem: Record is missing a
Why?
signed consent form.
Answer: Staff is trained but they

Why?
failed to obtain consent form.
Answer: There are many things to

remember and staff simply forgot. Why?
ROOT Answer: There is no process or

system in place to remind staff that they need to obtain consent form.
CAUSE

Monitoring Checklist
Requirement Contract Reference Requirement
Monitoring Responsibility Timeframe
Monitoring Method
Meets/Does Not Meet Requirement Comments
See Monitoring Checklist in Reference Section
Vendor Performance Monitoring: Follow Up

Follow up is critical, as a problem will not be resolved simply by including the problem
Contract managers must follow up to:
Ensure vendor has taken corrective action to resolve the issue.
Identify common problem areas that might require additional training.
Improve contract requirements for future contracts.
See Monitoring Follow Up Examples in Reference Section

Managing Vendor Performance Exercise
Managing Vendor Performance Scenario #1

Vendor is performing consulting services for a government entity. The project must be completed in 90 days.
Since the entity took 21 days, the vendor asks for a 10‐day extension to complete the report and deliver the fi
As the contract manager, what would you do?
What could be done to make sure this does not happen again?

Vendor (sole‐proprietor) has a contract for one‐time services to trim trees at a government headquarters building. Th
As a contract manager, you agree to the additional time and issue a contract amendment to extend the contract for 1
On day 41, the contract manager finds out that the work is still not completed. The vendor is contacted and says his w
What do you do now? How could have this been handled differently?

Your entity has an annual contract for the temporary services of an interpreter for the hearing impaired. The contracted hourl
The contract manager reviews the invoice and realizes that the meeting was only 4 hours. When the vendor is contacted abou
Would you approve this invoice for payment? Why or why not? What can be done to ensure this does not happen again?

A vendor is awarded a six‐month contract to research the feasibility of a state supported child care
The vendor submits an invoice after 30 days for 40% of the contract amount. You don't believe tha
What should you do to resolve this issue? What could be done in future contracts to ensure this do
Change Management

Change Management
Contract change is inevitable.
Common changes should be built into the contract. Common changes include:
Time of performance
Contract prices
Extensions and renewals
The importance of developing a formal change management process cannot be over
Change Management Process

Changes must be in accordance with the terms of the contract.
Only changes that are due to legitimate unforeseen

circumstances should be allowed.
Evaluate changes in terms of the impact on the scope, schedule, and budget.
Formal, written approval of all changes

is required prior to the change taking place.

Change Management
What will change? Why is change necessary?
Changes must be within the scope of the contract. The contract requirements must
A significant difference in the scope of work would be a material or substantial chan
Administrative Changes
Changes within the scope of the contract and
do not affect the rights of both parties.
Changes allowed within existing contract
Address or personnel changes
Typographical errors
Unilateral agreement –
(One party can make the change)

Substantive Changes
Changes affect the rights of both parties
Prices, quantities
Delivery schedule
Performance requirements/conditions
Terms and conditions
Bilateral agreement
(Both parties must agree to the change)
Constructive Changes
Constructive changes occur when the government entity:
Provides suggestions to the vendor
Accelerates the delivery schedule
Directs the work to be performed differently
Changes the sequencing of the work
Delays accepting or rejecting deliverables
Delays reviewing invoices and approving payment
Interferes with or hinders performance

Change Management
Be Careful What You Ask For:
If the vendor perceives that your entity has requested work beyond the scope of the contr
…they may claim that this “constructively changes” the contract and the vendor may be en
Video: Contract Modifications ‐

One Size Does Not Fit All!
https://www.youtube.com/watch?v=LotPHWkKJNohttps://ww
w.youtube.com/watch?v=LotPHWkKJNo

Poll: Allowable Change
Change Management
When determining what constitutes scope changes, the critical question is whe
Such changes are measured by the number of changes made to the original spe
Consider if the changes would deny a potential vendor an opportunity to comp

Closing Tips & Guidance
Provide clear guidance for developing, awarding, and monitoring contracts.
Provide training to contract managers
Communicate with the vendor as early as possible and conduct kick‐off meetings.
Monitor and track contract performance.
Document communications and contract changes.
Be diligent in managing contracts and hold vendors accountable to the contract terms and
Source: NASPO Contract Administration Best Practices Guide
Thank You!
Janet Hasty, CPPO, CTPM
888‐254‐7715

Source Documents
State of Texas Procurement and Contract Management Guide, Comptroller’s of Public Accounts, St
National Association of State Purchasing Officials Contract Administration Best Practices Guide.
National Institute of Governmental Purchasing, Dictionary of Purchasing Terms.
Components of an Effective Contract Monitoring System, Atlanta, Georgia Department of Audits a
Best Practices in Contract Management: Are you using them?, Contractworks, March 13, 2018.

Contract Administration Plan (CAP)
Contract/Project
name Contract
number Contract type
Contractor name
Published by:
Agency
name
Contract administrator name
Version
Date
[Text in blue brackets are notes to the contract administrator to aid in completing the plan sections.
Delete this and all other blue notes when finalizing.]
[Highlighted text are examples only. Replace the text with agency information and remove highlighting.]
Page 1
DAS Procurement Services, Version 1 – March 30, 3
INTRODUCTION
The Contract Administration Plan (CAP) strengthens an agency’s ability to monitor and act on the
contract and, if applicable, a project related to the contract. CAP topics may include:
 Performance
 Work progress as it relates to schedule
 Deliverables
 Compliance with requirements
 Test results
CONTRACT ADMINISTRATION PLAN OVERVIEW

Purpose of the Plan
[This section should address the purpose of the CAP as it directly relates to the contract.]
Summary Products and Services Scope

[This section should provide a summary of the products or services provided by the contractor. It should
include the type of work being done, significant features, and goals of the agency and contract.]
Intended Audience
[Tailor the following table to reflect the intended audience or users of the CAP. The table should list the
CAP sections most relevant to the user type and the purpose for which a user may reference the
information.]
[Include agency, state-level and contractor roles that are contract stakeholders.]
Intended Audience and Document Purpose

Users Relevant Sections Purpose
Agency Executive Sponsor(s)
Agency Project Manager
Agency Contract Administrator
Agency Designated
Procurement Officer
Risk Management Team
Contractor Key Personnel
DAS Procurement Services, Version 1 – March 30, Page 2 of
4
ROLES AND RESPONSIBILITIES
[The key to building a strong contract administration team is finding members with the right skill sets
and schedule availability to support contract administration activities. Team members should be the final
product or service stakeholders and should have the knowledge and skills to fill particular areas of
expertise. Team members must have clear roles and responsibilities and established communication
channels to work together effectively. The team should include three to five members and should
leverage the knowledge of Subject Matter Experts (SMEs) as needed throughout the contract term.]
Contract Administration Team

The following table lists individuals who have direct oversight responsibility to ensure the agency
receives and accepts the deliverables and services identified in the contract.
[The team may include, and should distinguish between agency-specific and state-level contract
personnel.]
Administration Team’s Roles and Responsibilities

Name Role Responsibilities
Agency Sponsor
Agency Contract Administrator
Agency Project Manager
Contract Support Team

The following table identifies the individuals responsible for supporting contract administration through
provision of subject matter expertise, designing, implementing, and testing the requirements,
deliverables and services identified in the contract.
[The team may include, and should distinguish between agency-specific and state-level contract
personnel.]
Support Team’s Roles and Responsibilities

Name Role Responsibilities
Technical SME
Finance SME
Procurement SME
Legal SME
Program SME
4
COMMUNICATION PLAN
[The following table provides an example of the elements to document in a communication plan.]
[Proactive communication is critical to the success of the contract. Be sure that communications are
timely, constructive and include relevant feedback. Use a variety of communication methods such as
e-mail alerts, status reports, watch lists, risk reports, and formal or informal reviews.
Communication may be formal or informal. Communications required by the contract are formal
communication. Non-binding or informal communication does not constitute contract direction and does
not change the scope or terms and conditions of the contract.
This section should detail the team’s plan to communicate both internally and externally with the
contractor, including who is responsible for initiating each type of communication.]
Communication Register
What Who When How
Information
Requirement Provider/ Recipient/ Timeframe/ Distribution Disposition
Description/Title Stakeholder Stakeholder Frequency/Trigger Format Method Method
SCHEDULE AND DELIVERABLES

[If the information in this section of the CAP exists elsewhere (e.g., MS Project) simply attach a copy of
the existing information and skip ahead.]
Schedule
The following table contains a high-level schedule organized by the tasks that comprise the work
specified in the contract.
Schedule
Responsible
Task Identifier / Name Party Duration Start Finish
1.0 Parent Task Name No. Days Start Date Finish Date
1.0.1 Sub Task Name No. Days Start Date Finish Date
1.1 Parent Task Name No. Days Start Date Finish Date
4
Schedule
Responsible
Task Identifier / Name Party Duration Start Finish
Deliverables
The following table identifies all deliverables related to the contract. These items include:
 Deliverables related to products or services specified in the contract. For technical projects, this
table should also include any deliverables related to functionality or overall implementation of
the solution.
 Deliverables related to reports or other contractor submittals specified in the contract.
Contract Deliverables
Contract
Clause/ Responsible Action Due Date/
Task Deliverable Party Required Frequency
4
RISK/ISSUE MANAGEMENT PLAN
[This section documents the agency’s risk response strategy for a major high-risk contract or project. Keep the strategy updated as the project
progresses and as new risks or issues arise. The risk response strategy focuses on contractual items and not project items unless the project item has
a potential impact on the contract (i.e. deliverables, budget, schedules, etc.).]
Risk management is a three-part process involving:
1. Identifying risks
2. Quantifying and analyzing the likelihood of and the potential impact of identified risks
3. Determining how to manage, mitigate or eliminate identified risks
The following table contains a list of project risks that require management.
Risk Management
Risk Risk Responsible Target
Id Description P I S Response Action Party Completion Status
Risk Management Legend

P - Probability I - Impact S - Severity Risk Response
1 – Improbable 1 – Negligible 1 – Low Avoid – take action up front to reduce the probability, or impact (or both), to zero.
2 – Probable 2 – Marginal 2 – Medium Transfer - make someone else responsible for particularly risky portions of the project.
3 – Very likely 3 – Critical 3 - High Mitigate - take actions to lessen the impact or the probability that the risk will occur.
4 – Catastrophic Accept - the risk may be small enough (in impact or probability) such that the cost and
effort of any preventative measures are out of proportion of the risk itself.
4

CONTRACT PERFORMANCE MONITORING PLAN
[This section should address contract elements relating to contractor oversight.]
Contract Meetings
The following table outlines the schedule of meetings required in the contract and other meetings
needed to monitor the contract and contractor performance.
Scheduled Meetings
Meeting Date/Frequency Facilitator
Contract Initiation/Kickoff Once
Weekly Section Team Meeting Weekly
Weekly Team Leads Meeting Weekly
Monthly Executive Meeting Monthly
Quarterly Executive Meeting Quarterly
Contract Monitoring and Reporting

The following table contains a list of required documents, reporting frequency, and the approver or
approving group that is associated with internal monitoring and reporting of contract and contractor
performance.
Contract Performance Reporting

Document Name Frequency Approver
Weekly Status Report Weekly
Monthly Executive Status Report Monthly
Requirements Traceability Matrix Monthly
4
Risk/Issues Management Reporting
The following table contains a list of required reports, reporting frequency or due date, and the
approver or approving group that is associated with internal risk and issue management activities.
Risk/Issue Management Reporting

Due Date/
Report Name Frequency Approver
Performance Measures/Tracking
The following table lists the performance measures or required performance items to track according to
the contract.
Performance Measures
Contract Frequency of
Performance Measure Reference Method of Measure Measurement
Inspection and Acceptance Process

[Describe the strategy for ensuring contract requirements conforms to quality assurance provisions and
address the roles and responsibilities of the individuals involved in this process. Also, reference the
sections in the contract that address inspection and acceptance.]
Invoice and Payment Process

[Describe the plan or process (e.g. instructions, certifications, documentation, etc.) for reviewing and
approving invoices; and reference the invoice requirements addressed in the contract. Also, discuss the
roles and responsibilities of those individuals that have direct involvement in the process.]
Contract Change Control Process

[Describe the strategy and procedures for managing the formal change control process to scope, cost
and schedule as well as mitigating variances to approved scope, cost or schedule. If the contract includes
a process, include the requirements of that process here. This paragraph should include the individuals
responsible for the review and approval of baseline changes and variances.]
4
Contractor Management
[Describe the contractor management process and include contract references to remedies. Also, identify
individuals responsible for controlling and overseeing this process.]
OTHER CONTRACT ADMINISTRATION

State/Agency Obligations
The following table describes any applicable state or agency assets, including property, services or
information, furnished to the contractor to fulfill the requirements of the contract. Identify the contract
requirement and specific state- or agency-furnished asset, the procedure to furnish and ensure
accountability of the asset and the responsible party for controlling the asset.
State/Agency Obligations
Controls and
Requirement Asset Type Management Responsible Party
Agency shall ensure Agency will ensure the Agency will perform Agency Project
government controlled following systems are reviews of system Manager
data systems can be available to the utilization through:<>
securely accessed by contractor throughout
contractor as needed the period of
to provide performance of this
infrastructure support contract:<>
as described in section.
Contract Closeout
[Describe the procedures or processes used to ensure fulfillment of the contract requirements at
closeout.]
DAS Procurement Services, Version 1 – March 30, Page 9
4
SAMPLE
CONTRACT ADMINISTRATION
Keeping a complete master contract administration file is critical and must be
maintained by the government entity. This file will provide a basis for settling
claims and disputes should they arise in administrative or court actions.
Throughout the life of the contract, the contract administration file will provide a
single, easily accessed repository for those documents related to contract duties
and performance, and it should contain the following documents:
 A copy of the current contract and all modifications.
 A copy of the vendor document’s including:
o Required insurance documents
o Warranty information
o Licenses, permits, certifications
 A copy of all specifications, drawings or manuals incorporated into the
contract by reference.
 A reference list or a list of prior contracts with this specific vendor (if they
offer valuable historical data)
 The solicitation document, the vendor's response, evaluation
determination, and the notice of award document.
 A list of vendor submittal requirements.
 A list of government furnished property or services.
 A copy of the kick-off meeting summary, if conducted.
 A schedule of compliance review and internal correspondence
 A copy of all general correspondence related to the contract.
 The originals of all vendor data or report submittals.
 A copy of all routine reports required by the contract such as sales reports,
pricing schedules, approval requests, and inspection reports.
 A copy of all notices to proceed, to stop work, to correct deficiencies,
notice of termination, or change orders.
4
SAMPLE
CONTRACT ADMINISTRATION
 A copy of all letters of approval pertaining to such matters as materials, the

vendor’s quality control program, prospective employees, and work
schedules.
 The records/minutes of all meetings, both internal and external, including
sign-in sheets and agendas.
 A copy of all monitoring reports: site visits, desk reviews, and expenditure
documentation reviews, etc.
 A copy of all vendor invoices, information relative to discount provisions for
prompt payment, letters pertaining to contract deductions or fee
adjustments.
 A copy of all backup documentation for vendor payment or progress
payment; and copies of any audits.
4
Invoice Review Checklist Example #1
Reviewer: Date:
Vendor: Contract #:
Description: Contract Manager:
Invoice Number: Invoice Date:

Received Date: Invoice Total: $
Vendor must be notified within 21 calendar days ( / / )
if there is a discrepancy 21st calendar day
Texas Payee Identification Number (TINS □ Yes □ No
Does the vendor's legal name and address match the contract? □ Yes □ No
Date of last invoice (if applicable) ( / / )
Rates/charges/fees shown on the invoice are authorized under the contract? □ Yes □ No
Services performed or goods received are authorized in the contract? □ Yes □ No
Services or goods were provided during a valid contract period? □ Yes □ No
Vendor submitted HUB Subcontracting Progress Assessment Report, if required? □ Yes □ No
Services or goods provided are acceptable? □ Yes □ No
Deliverables are received and accepted? □ Yes □ No
All of the calculations in the invoice add up correctly? □ Yes □ No
Invoice sufficiently details/supports work performed? □ Yes □ No
Contract Manager recommends invoice be paid? □ Yes □ No
If NO, explain why not recommended for payment:
If NO, date vendor was notified of discrepancy: ( / / )

 Attach copy of letter or email sent to vendor
 Notify Accounts Payable that invoice is in dispute
Budget Tracking
Invoice Number Invoice Amount Project Budget Percent of Project Amount Paid to
(Interim or Final) Competed Date
Is payment of the invoice within the contract total amount? □ Yes □ No
Contract Manager's Signature
5
Invoice Review Checklist Sample #2
The following checklist can assist the District Contract Manager in reviewing and approving
invoices. The list is illustrative, not inclusive.
 The District has date stamped the original signed Cover Letter and Invoice immediately upon
receipt.
 Grantee has provided a Cover Letter that includes the following:

 Submitted on Grantee letterhead
 Addressed to the District Contract Manager
 Project title is in the subject line
 Date of the invoice
 Invoice number (e.g., Invoice # 1)
 FTA number
 Dates of service of the invoice (cannot begin prior to contract execution or after contract termination)
 Invoice amount
 Signed by Grantee
 Grantee has provided an Invoice that includes the following:

 Submitted on a Grantee letterhead
 Includes remittance address
 Date of the invoice
 Invoice number (e.g., Invoice # 1)
 FTA number
 Dates of service of the invoice
 Project title
 Amount invoiced by Task
 Includes overall funding summary
 Grant funding amounts allocated for each task has not been overspent. If so, make note to the
Grantee (Grantee will be advised to spend less on another task on a later invoice).
 Invoice indicates the correct proportional local match (cash and in-kind) for each task as outlined
in the Project Timeline.
 Grantee has provided an Invoice Summary which summarizes all work completed per task
during the dates of service of the invoice.
 Invoice and invoice summary must be consistent with the Scope of Work and Project
Timeline.
 If Grantee has a sub-recipient/consultant, they must also submit an Invoice Summary for work
completed.
 Grantee has provided Documentation of Expenditures (receipts, staff timesheets,

cancelled checks to consultant, consultant invoices, etc.)
 Documentation falls within the dates of service of the invoice (which also needs to fall within the
start date and termination date of the contract).
 All costs are eligible (review eligible and ineligible expenses per the Handbook).
 Adequately shows that costs have been expended by the agency. (All staff, sub-recipient work,
consultant work, and expenditures must be paid for prior to requesting reimbursement from
Caltrans).
 Review invoice and deliverable(s) to verify what was paid for has been obtained.
 If the Grantee has an Indirect Cost Allocation Plan (ICAP), documentation of the approved
percentage and breakdown of indirect costs per task is provided.
5
Contract Monitoring Checklist Example
Meets
Responsible
Reference Requirement Requirement? Timeframe Monitoring Method Comments
Y/N Party
Vendor conduct 3 months after 1) Review HR Policies and procedures for
Criminal Background award background checks incorporated into their
check for employees then at contract internal procedures.
on hire renewal if vendor 2) Check that criminal background check
compliant requirement is included in contracts with
RFP Para 8.1 CA
subcontractors
3) Conduct random sample check of employee
files at three months. Based on results, determine
when or if will need to be repeated other than at
contract renewal.
Vendor Employees Ongoing Quarterly Require Vendor to submit listing of current
sign non-disclosure personnel working on project at project status
statement update meetings.
Current employee
RFP forms due within 30
CA CA cross check personnel listing with Non-
Para 8.2 days of award
Disclosure forms.
Copies for all new
employees within one
week of hire
HUB Subcontracting Monthly Review HUB Plan
Plan Review PAR report submitted monthly by vendor.
Prime Contractor Check dates of payments to subcontractors
T&C’s
Progress Assessment Check to see monthly is changes made to
6.9 CM
Report subcontracting that would affect the HUB Plan.
Vendor HUB Plan must be updated if any changes
made.
Vendor and its Within 3 months 1) Review vendor’s HR hiring policies and
subcontractors shall after award procedures
not discriminate or 2) Review sample solicitation for subcontracting
T&Cs participate in any Follow up TBD or purchase of materials for statement of
CM
6.10 discriminatory based on findings nondiscrimination obligations
employment practices 2) Review subcontractor contracts for the
incorporation of Paragraphs (1) to (6) from T&C’s
Insurance Must be current Coordinate with Purchaser receipt of Insurance

T&Cs and on file before documentation.
CA
vendor begins work Set up tickler to check insurance is current based
on policy dates.
5
GPS Training 2021

Examples of Monitoring Follow
Up
Nature of Possible Action
the Response Other Optional Steps
Finding
Minor Concern
Communication with
contractor to clarify  Informal conversation with contractor
Example:
problem, increase  Letter to contractor
Contractor
contractor awareness of  Follow-up monitoring to
misunderstanding
possible risks, and offer verify compliance
of
information and  Corrective action plan
performance
assistance.
requirements
Systemic Issue Formal correction to  Escalate to program management
address and resolve the and Contract Management &
Example: problem and prevent any Oversight (COS)
Recurring problem future risk.  Enhance monitoring activities
which requires (increase scope or frequency)
specific action  Require a Corrective Action Plan
steps to correct  Formal notice to contractor warning
of possible sanctions if the problem is
not corrected
 Implement contract remedies or
liquidated damages as specified in
the contract
High Risk Contract Remedies to  Escalate to program management
resolve the problem and COS
Examples: and/or eliminate negative  Impose additional reporting
Significant harm impact. requirements
or risk of harm to  Reduce the services or dollars
individuals associated with the contract
 Collection of improper
Significant misuse payments/disallowances
of agency funds  Suspension of referrals or services
or resources  Modification of contract provisions
 Suspension of payments until the
Concerns of problem is resolved
fraud, waste, or  Impose liquidated damages as
abuse specified in the contract
 Deny contract renewal
 Reduce the contract period or
terminate prior to the contract end
date
 Report the contractor to Vendor
Performance Tracking System, to the
appropriate licensing organization, to
the Inspector General, or to law
enforcement.
Source: Texas HHSC Contract Management Handbook

53
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Overview & Best Practices

Vendor Performance Monitoring and Documentation

GPS TRAINING 2021

© GPS Training 2021 4

Owner, Government Procurement Services (2007)

Bachelor’s in Public Administration, St. Edwards University

Master of Public Affairs, University of Texas, LBJ School of Public Affairs

© GPS Training 2021 5

3. Vendor Performance Monitoring and

© GPS Training 2021 6

Effective Contract Administration Presumes Earlier Steps in

© GPS Training 2021 7

Maintains contract documentation and communicates w/ Purchaser for effective administration

Provides consultation on dispute resolution

Contract Manager Responsibilities

© GPS Training 2021 8

Contract Administration Best Practices

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See copy of a Contract Administration Plan in Reference Section

Contract Administration Best Practices (Continued)

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Failure to identify the risk/level of review necessary for each vendor.

Inadequate resources are assigned to contract management.

© GPS Training 2021 11

See sample Contract Administration File in Reference Section

Track to ensure insurance is effective throughout the term of the contract.

Insurance should be checked at renewal to ensure it is up‐to‐date.

© GPS Training 2021 12

Review and approve invoices

See Sample Invoice Checklist in Reference Section

© GPS Training 2021 13

Proceeding with changed work without proper authorization or paperwork.

Failure to review or verify invoices; too dependent on vendor self‐report.

Failure to review or approve deliverables in writing.

Failure to document contract administration activities.

© GPS Training 2021 14

Subject: Common Contract

Vendor Performance Monitoring and Documentation

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Effective Vendor Performance Monitoring Requires:

© GPS Training 2021 16

Extract from those documents the performance requirements to be monitored.

Prioritize performance requirements for monitoring by risk level.

Vendor Performance Terminology

© GPS Training 2021 17

You are building a house and the inspector just

© GPS Training 2021 18

Did you find them useful?

© GPS Training 2021 19

© GPS Training 2021 20

© GPS Training 2021 21

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Third‐party monitoring could also be through testing of products to ensure independent ve

Enhanced monitoring methods may include:

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All meetings should be documented and notes/minutes circulated to confirm dis

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Which Type of Monitoring to Use?

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Instead of just “putting out fires”, find a way to prevent them!

© GPS Training 2021 26