Contract Management. Discover What s Ideal and What s Downright Unacceptable. Tammy Rimes Consulting

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2 Contract Management Discover What s Ideal and What s Downright Unacceptable Tammy Rimes Consulting

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4 Life Span of a Contract Need Process Management Operational Department need The Need is identified and requires definition Budget is approved Forms and request put into Purchasing Create the specifications Procurement process is determined Insurance requirements assessed RFP or bid documents are created Issued, Vendors Respond, Evaluation Vendor Selected, Insurance received Contract put in place Department receives product or service Department inspects and oversees vendor s performance Address issues or problems Submit invoice for payment Vendor receives payment Renew on option years

5 What is a Contract? Single purchase contract A single purchase with one delivery. Blanket contract Specified multiple purchases. Term contract Multiple as-needed, when-needed purchases over a specified time. Multi-term contract More than one specified time period (term) option years Multiple award contract More than one vendor is awarded a contract.

6 Valid Contract Contracts must contain all of the required elements. Offer and acceptance Consideration Mutuality of obligation Capacity of the parties Legality of purpose Contracts must comply with all applicable public procurement laws

7 Responsibilities of Contract Manager Serve as primary contact for the vendor and representative of the City Understand the contract specifications and responsibilities of the vendor and monitors performance Addresses any contract adherence deficiencies Document problems, issues or communication Liaison with Purchasing regarding the contract

8 Specifications starts here! Bid to Contract Management Not Restrictive, Encourage Open Competition Provide for Quality Control Creates standards and simplifies inventory Shall vs. May Sufficient Details for Monitoring Performance

9 What do You Think? A blue folder with three hole punch, opening to the right with at least one internal pocket An 8-foot picnic table that seats at least six people Biosodium 2% mixer with chlorine and water for a 2 part to 1 part ratio

10 Specification Development Customer Department s Knowledge and Expertise Product information from the industry Standards and test information from professional societies Spec information from other governments NIGP: The National Institute of Governmental Purchasing maintains a library of over 10,000 specifications developed by federal, state, and local government purchasing entities

11 Scope of Work Outlines specific services a supplier is expected to perform, by indicating the type, level and quality of service, as well as the time schedule required.

12 Example Contractor shall deliver materials to the warehouse during the week. Unloading the materials will be the responsibility of the contractor. A shipping report will be delivered and signed. What days of the week? What timeframe? How do they unload, by hand or by equipment? Who provides the equipment? What do they do with the shrink wrap and pallets? What does the shipping report look like? Who signs it? Who gets a copy? Does their truck and uniforms have to be clearly marked?

13 Example Contractor shall maintain the lawns and landscaping around the Parks, Recreation & Marine Administration Offices. These duties include mowing, trimming, sweeping, watering, and keeping all facilities in an accessible manner for residents. How often do they maintain? What hours? Is there a requirement on grass length? What do they do with the cuttings? Do they close the park while cleaning? For how long? What does accessible mean? Brooms vs. blowers? Do they have to wear uniforms?

14 Paranoid? What could go wrong? What could be misunderstood? What is the public perception? What is our liability?

15 RISK Tolerance Dollar Amount Complexity of Project / Service Political or Social Impacts Media or Community Interest Vendor Experience History of Problems

16 Meeting with Suppliers Meeting at your location or service site Bring specs and SOW Vendor should bring site manager or supervisor Friendly, but Firm

17 Documentation Crucial! Legally Defendable Greater understanding for both sides Keep it Simple Vendor Performance Form

18 Correspondence Minimum of annually Formal and detailed Bad and Good News Short and to the Point vs. Letter vs. Phone call

19 AUDITS and Spot Checks Unannounced and Announced Document Findings For Deficiencies, issue correspondence Higher dollar amount OR public exposure greater the frequency

20 Reports What does the vendor already provide? What would you like to have reported? Who receives copies? Who reviews and is there feedback?

21 How Would You Handle? Receiving complaints from public regarding the restroom conditions of a local City library City Council office has received calls and contacted Director Current contractor is scheduled 3X a week in the library and 1X per week outside the library Materials are provided by another vendor, but often stolen or missing when janitorial staff arrive to clean

22 HOW WOULD YOU HANDLE? Auto parts supplier delivers parts to Fleet and other departments for their automotive and equipment needs 1 st year of citywide contract Invoice submitted for parts delivered to multiple departments other than yours Vendor sends multiple invoices with past due notices

23 How Would You Handle? Graffiti company takes care of problems across the City No complaints received Invoices submitted; paid promptly Reports from vendor received each month with all the activities Company president has received accolades from City Council on their good work

24 How Friendly? Cannot accept gifts or favors Influencing contractor for personal gain Making promises for future business Soliciting favors or considerations for family members Dating or personal relationships

25 Contract Closeout Days before expiration Review Specs and Scope of Work Contact Purchasing Meet with Vendor / Receive Final Reports Final Invoicing and Payments No Promises!

26 COOPERATIVE PROCUREMENT Meeting with vendor / contractor Correspondence Audits and Spot Checks Reports and evaluations

27 27 Develop a strategy Rank Them! Year of contract? Frequency of Contact Recent Review of Reports Next time Around

28 Questions? Tammy Rimes, MPA Keynote Speaker and Procurement Consultant