Government

Procurement
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

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 Contract
Administration
PRESENTED BY: JANET HASTY, CPPO, CTPM
GOVERNMENT PROCUREMENT SERVICES

Virtual Class
Etiquette
 Participate!!!! Use chat or the  Workbook
“raise your hand” button for
questions or comments.  Class Hours

 Keep microphone muted  Certificates and Survey

 Keep webcam on  Wear pants!

 Rename yourself, if needed.  Let’s get started!

Click on the “more” button.
 If you experience technical
issues, leave the meeting and
rejoin thru the link.

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 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

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 Contract Administration
1. Overview & Best Practices

2. On‐Going Maintenance

3. Vendor Performance Monitoring and

Documentation

Overview
&
Best
Practices

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 Definition:
Contract Administration
A subset of Contract Management, which includes all
monitoring and administrative activities that take
place from the time the contract is awarded until
contract closeout.

Contract
Administration

Effective Contract Administration

Presumes Earlier Steps in the
Procurement Cycle!
 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.

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

Contract Manager Responsibilities

Once the contract is awarded, the contract manager
has ownership of the contract. Their duties include:
 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 the vendor.

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 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) without adequate
written documents.
 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 components are
universal and should be a part of every entity’s
contract administration process:
 Employees trained in contract administration; including
position authority and responsibility to administer
contracts.
 Clearly communicated expectations to vendors through
a detailed statement of work, performance measures,
and kick‐off meetings.

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 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 promptly.
 Anticipate evolving business needs. An entity’s needs
at contract signing won’t necessarily remain the same
throughout the contract. Make a plan to address
these fluctuations in demand and upcoming changes.

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 milestone dates, and
other problems that derail contract success.
 A contract management system easily tracks changes
and approvals. It also provides automated notification
and reminder tools which allow you to input key dates
in the beginning, so you don’t need to worry about
remembering them throughout the contract period.
Contract Management System

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 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

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 Contract Maintenance:
The Contract Administration File
 Managing all documents related to the contract is
critical for effective contract administration.
Documentation should be detailed and accurate.
 These documents provide the basis for all
contract administration activities.
 Should there be problems or issues; specific,
accurate, and dated documentation is vital to
protect your entity’s interests. If a dispute arises,
the party with the best documentation usually
wins!
See sample Contract Administration File in Reference Section

Contract Maintenance:
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.

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 Contract Maintenance:
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. t
Closeout Checklist in Reference Section

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 managers are more
concerned about the vendor than the entity.
Assume the accounts payable staff is “auditing”
invoices.

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 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.

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 Group Discussion Time!!!
Subject: Common Contract
Administration Issues

Vendor
Performance
Monitoring and
Documentation

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 Vendor Performance Monitoring
The contract manager
monitors the contract to
ensure the vendor is
performing all duties in
accordance with the contract
and addresses any
developing problems or
issues.

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
relevance to the procurement.

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 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 software component or a
computer]. A deliverable can be an interim result that
contributes to the completion of the entire project, such
as the creation of help desk tickets for a help desk
implementation project.
 Milestone – checkpoints throughout the contract. They
identify when one or multiple groups of activities are
completed thus implying that a notable point has been
reached in the contract. A milestone represents the
completion of a major step in the project [e.g. document
current processes].

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 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 details the level of
service and the quality of the service to be provided.

 Performance Measures – tools used to measure

performance and quantitatively evaluate progress toward
planned targets. Also known as Key Performance Indicators
(KPIs).

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 Video: How to Develop Key
Performance Indicators
https://www.youtube.com/watch?v=2tuWjtc2Ifk

• 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 complexity of contract.
 Desk Reviews
 Site Visits
 Third Party Monitoring
 Enhanced Monitoring
 Customer Satisfaction Surveys
 Quarterly Performance Reviews
 Inspection and Testing

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 Poll: Monitoring Methods

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

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 Monitoring Methods:
Site Visits
Site visits are used to verify actual performance
against scheduled or reported performance.

 Full Scope Visits are generally scheduled visits to

monitor contract compliance and vendor performance.
These visits also serve as an opportunity to build a
working relationship with the vendor.

 Limited Scope Visits are typically used for problem

resolution found as a result of problems identified in a
desk review or customer complaint.

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 template for each individual contract.
 At the completion of the site visit, prepare a site
monitoring report that documents the site visit
findings. Provide a copy of the report to the
vendor and request the vendor to provide a
Corrective Action Plan, as necessary.

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 Corrective Action Plans
 A corrective action plan is a set of actions to
correct an issue, problem, non‐compliance or
underperformance.
 The plan must:
 Address the identified deficiency
 Clearly state the desired outcome
 Establish a time frame for the vendor to
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 are generally
recommended for large, complex contracts.

 For example, a site visit would be unnecessary for a

consultant hired to assist with an entity’s strategic plan. But,
it would be beneficial to conduct a site visit for a childcare
facility contracted to provide after‐school programs.

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 Monitoring Methods:
Third‐Party Monitoring
 In some cases, contract monitoring is done by a third‐
party. This is also known as “independent oversight”.

 This is common in building construction where an

architectural firm monitors the progress of a
construction company.

 Third‐party monitoring could also be through testing of

products to ensure independent verification and
validation.

Monitoring Methods:
Enhanced Monitoring
 Enhanced monitoring is usually associated with high
dollar and high risk contracts and includes an increased
level of monitoring. It also could be used a result of
previous unsatisfactory performance.

 Enhanced monitoring methods may include:

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

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 Monitoring Methods:
Customer Satisfaction Surveys
 Used for both internal and external customers
to survey about vendor performance.

 Web‐based survey tools can be used to collect

and analyze customer survey data (Survey
Monkey, SoGoSurvey, Zoho Survey, Survey
Gizmo)

Monitoring Methods:
Quarterly Performance Reviews
 Opportunity to address and resolve issues or used
as a preventive measure to manage contract,
vendor, and issues.

 All meetings should be documented and

notes/minutes circulated to confirm discussions.
These can be face‐to‐face meetings,
teleconferences, or web conferencing.

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 Monitoring Methods:
Inspection and Testing
 Goods and/or services must be inspected upon
receipt to ensure they comply with the contract
requirements.

 Testing may be necessary for some goods. Samples

are submitted by the vendors and goods are tested
by entity staff or by third‐party contracted vendor.

Which Type of Monitoring to

Use?
 The components used to monitor a contract are
dependent on many factors, especially the
complexity of the contract, the contract amount,
and the risk level of the contract.
 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 annual
contract for auditing services. However, on‐site
monitoring and customer satisfaction surveys might
be appropriate for a vendor operated concession.

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 Monitoring
Methods Exercise

Vendor Performance
Monitoring: Root Cause Analysis
 Often, noncompliance issues are identified, but we
don’t look at the “root cause” of the problem. If we
don’t get to the root cause, then the problems are
likely to happen again.

 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 answer, ask “why” again
until such time that you get to the root cause.

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 Many Late Missing
Symptoms Revisions Deliveries Deadlines

Invoice
Insufficient Errors
Progress
Communication
Issues

Unclear
Training Insufficient Specifications
Insufficient or Processes
the wrong type

Root Schedules Automated

Expectations are vague Process
Causes Needed
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

failed to obtain consent form. Why?

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
CAUSE they need to obtain consent form.

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 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 in your
monitoring report.
 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

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 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. On Day 70, the vendor
provides a draft report to the entity to review and comment
before submitting the final report. The entity takes 21 days to
review the report and comment back to the vendor, instead of
the 10 days specified in the contract.
Since the entity took 21 days, the vendor asks for a 10‐day
extension to complete the report and deliver the final product to
the entity. Executive management wants the report ASAP, but
they were the ones that caused the delay.
As the contract manager, what would you do?
What could be done to make sure this does not happen again?

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 Managing Vendor
Performance Scenario #2
Vendor (sole‐proprietor) has a contract for one‐time services to trim
trees at a government headquarters building. The work must be
performed within 30 calendar days after award. The vendor calls on Day
22 and says he has a family emergency and he needs an additional week
to attend an out of state funeral.
As a contract manager, you agree to the additional time and issue a
contract amendment to extend the contract for 10 days, for a total of 40
days.
On day 41, the contract manager finds out that the work is still not
completed. The vendor is contacted and says his work is backed up
because he was attending the funeral, but that he will be there by the
end of the week. At the end of the week, the vendor is a no show.
What do you do now? How could have this been handled differently?

Managing Vendor
Performance Scenario #3
Your entity has an annual contract for the temporary services of an
interpreter for the hearing impaired. The contracted hourly rate is $48.00 for
services rendered in Dallas, Texas. At the last minute, the user department
moves the meeting to Arlington, Texas and notifies the vendor of the change
in location. The vendor shows up at the Arlington location and performs the
services. The invoice is submitted as follows:

Invoice Item #1 (Interpreter Services) – 6 Hours @ $48.00 = $288

The contract manager reviews the invoice and realizes that the meeting was
only 4 hours. When the vendor is contacted about the discrepancy, they say
the additional two hours is due to the location change.

Would you approve this invoice for payment? Why or why not? What can be
done to ensure this does not happen again?

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 Managing Vendor
Performance Scenario #4
A vendor is awarded a six‐month contract to research the
feasibility of a state supported child care facility in
downtown Austin. Payment is based on the percentage of
work completed.
The vendor submits an invoice after 30 days for 40% of the
contract amount. You don't believe that 40% of the work is
completed.
What should you do to resolve this issue? What could be
done in future contracts to ensure this does not happen
again?

Change Management

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 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 overstated.

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.

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 Change Management
 What will change? Why is change necessary?
 Changes must be within the scope of the contract.
The contract requirements must be consistent with
what was originally solicited during the
competitive process.
 A significant difference in the scope of work would
be a material or substantial change and would be
not be allowed. To allow such a change would go
against the idea of competition and a fair playing
field for all vendors.

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)

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 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

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 Change Management
Be Careful What You Ask For:
If the vendor perceives that your entity has
requested work beyond the scope of the contract
or that your entity has created delays or hindered
performance …
…they may claim that this “constructively changes”
the contract and the vendor may be entitled to
additional compensation.

Video: Contract Modifications ‐

One Size Does Not Fit All!

https://www.youtube.com/watch?v=LotPHWkKJNohttps://ww
w.youtube.com/watch?v=LotPHWkKJNo

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 Poll: Allowable Change

Change Management
 When determining what constitutes scope
changes, the critical question is whether the
changes are material or substantial.
 Such changes are measured by the number of
changes made to the original specifications, and
the extent of the change.
 Consider if the changes would deny a potential
vendor an opportunity to compete for the revised
specifications.

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 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 conditions.

Source: NASPO Contract Administration Best Practices Guide

Thank You!
Janet Hasty, CPPO, CTPM
Government Procurement
Services
888‐254‐7715
janet@gpstraining.biz
www.gpstraining.biz

68

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 Source Documents
 State of Texas Procurement and Contract Management
Guide, Comptroller’s of Public Accounts, Statewide
Procurement Division.
 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 and Accounts.
 Best Practices in Contract Management: Are you using
them?, Contractworks, March 13, 2018.

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 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 of 9
DAS Procurement Services, Version 1 – March 30, 2018 39
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

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40
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

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41
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

1.0.2 Sub Task Name No. Days Start Date Finish Date

1.1 Parent Task Name No. Days Start Date Finish Date

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42
 Schedule
Responsible
Task Identifier / Name Party Duration Start Finish
1.1.1 Sub Task Name No. Days Start Date Finish Date

1.1.2 Sub Task Name No. Days Start Date Finish Date

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

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 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.

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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

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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.]

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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.

Requirement
Agency shall ensure
government controlled
data systems can be
securely accessed by
contractor as needed
to provide
infrastructure support
as described in section.
State/Agency Obligations
Controls and
Asset Type Management Responsible Party
Agency will ensure the Agency will perform Agency Project
following systems are reviews of system Manager
available to the utilization through:<>
contractor throughout
the period of
performance of this
contract:<>

Contract Closeout
[Describe the procedures or processes used to ensure fulfillment of the contract requirements at
closeout.]

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 SAMPLE
CONTRACT ADMINISTRATION FILE
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.

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 SAMPLE
CONTRACT ADMINISTRATION FILE

 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.

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 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____________________________________________

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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.

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 Meets
Contract Monitoring Checklist Example

Responsible
Reference Requirement Requirement? Timeframe Monitoring Method Comments
Party
Y/N
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
Para 8.2 days of award CA cross check personnel listing with Non-
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.

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GPS Training 2021
 Examples of Monitoring Follow Up
Nature of the Possible Action
Finding Response Other Optional Steps
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 verify
misunderstanding
possible risks, and offer 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 or  Suspension of referrals or services
resources  Modification of contract provisions
 Suspension of payments until the
Concerns of fraud, problem is resolved
waste, or abuse  Impose liquidated damages as
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

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Government Procurement Services

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