Running Head: CONTRACT ADMINISTRATION and CHANGE ISSUES 1

Running head: CONTRACT ADMINISTRATION AND CHANGE ISSUES 1

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Class XXXX, Section XXXX, Fall 2012

CONTRACT ADMINISTRATION AND CHANGE ISSUES 2

Contract Administration and Change Issues

Contract administration

Contract administration includes the activities that are performed by government officials after the parties award a contract to be sure how well the government and the contractor meet the requirements of this contract. It controls those dealings between the government and the contractor starting from the time the contract is awarded and finishing with the time the work is completed and accepted by the customer or the time the contract is terminated and the payment is made. “As such, contract administration constitutes that primary part of the procurement process that assures the government gets what it paid for” (OFPP, 1994).

Contract administration focuses on supplying its clients with certain services or goods which are of requisite quality, on time and within the customers' budget.

The specific nature of contract administration varies from contract to contract. It can range from the minimum acceptance of a delivery and payment to the contractor to extensive involvement by program, audit and procurement officials throughout the contract term. Contract administration starts with developing clear, concise performance based statements of work to the extent possible, and preparing a contract administration plan that cost effectively measures the contractor's performance and provides documentation to pay accordingly. (OFPP, 1994)

Good contract administration makes sure that its clients are satisfied with the product or service that they obtain via the contract. To make it possible, contract administration involves contracting officers and the administrator.

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The importance of roles and responsibilities of contracting officers and administrator

Contracting officers are the U.S. military officers or civilian workers who have the right to enter into and manage contracts and determinations along with findings about such contracts.

Contracting officers take the next responsibilities. They are responsible for making sure the performance of all necessary actions take place so that the contracting is effective, they are responsible for “ensuring the terms of the contract and guarding the interests of the U.S. in its contractual relationships” (FAR, 2012). Contracting officers make sure that contractors get impartial, fair and equitable treatment. They request and consider the advice of specialists in audit, law, engineering, information security, transportation, etc. A contracting officer is responsible for making any determination or findings that may be required in connection with the procurement, ensuring that all statutory and regulatory requirements that apply to the procurement have been identified and observed, ensuring that all necessary preconditions to contract award have been satisfied before the contract is awarded, maintaining the contract file, which serves as the repository for all required documentation concerning the procurement and any resulting contracts.

The importance of role of a contracting officer is that only he or she has the authority to award, modify, or terminate contracts.

Another important role in contract administration is the role of the administrator. The contract administrator is a consultant or an employee, whose job is to provide the

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contractor with instructions, to certify payments, practical completion of making good defects and to issue the final certificate. The contract administrator is considered to be an architect, a project manager, an employer's agent.

“A contract administrator makes sure the parties employ due diligence to comply with the terms, conditions, rights and obligations of the contract. The contract administrator also coordinates any changes to the agreement that might occur over the course of the contract and performs the close out process when both parties have met their obligations” (Linda Harris, 2003-2012).

The importance of improving methods of creating contract schedules

The schedule is the crucial part of the contract, and the contractor needs to see if it is done properly. The project must be as well-defined as possible thoughtful of the obstacles that may occur, because there is no guarantee that everything will be handled perfectly.

The schedule includes the specifics of the project, for instance, start-finish dates, specifically defined tasks, milestones for delivery, etc. The schedule is a means of project management that helps the contractor effectively manage the time and the cost on a project. Such a schedule places the construction activities in the order according to which they will be performed. The importance of creating the contract schedule is that it allows the contractor to see if an activity takes longer than planned or if any of activities are ongoing. Eventually, this schedule lets a contractor see how any delays or changes will influence the upcoming activities and the completion date of construction.

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A policy that explains the role that the contract officer should have played in the dealings between the government and the contractor

The problem faced in the given situation is that NNSA and EM construction projects exceeded the initial cost estimates for completing these projects. Also, GAO reported that 9 of the 10 major construction projects were behind the schedule. GAO reports documented that the cost increases and schedule delays that have occurred for these projects were the result of inconsistent application of project management tools and techniques on the part of both DOE (The Department of Energy) and its contractors. That's why GAO continues to include DOE contract and project management on its list of government programs at high risk for fraud, waste, abuse, and mismanagement.

My task now is to refer to the last one, mismanagement, and to develop a policy according to which the contract officer should have acted in the dealings between the government and the contractor throughout all procedures.

Here is my policy suggested to improve the situation of DOE contracts and projects, which are those activities that should have been made by the contracting officer.

1. The performance of all needed activities. “Cost growth and and schedule slippage in many of the DOE projects occurred principally because of ineffective project management on the part of DOE's contractors” (GAO, 2009). Also, while “DOE requires final project designs to be sufficiently complete before beginning construction, it has not systematically ensures that the critical technologies reflected in these designs have been demonstrated to work as intended prior to the start of construction” (GAO, 2009). One of the main responsibilities of the contracting officer is to ensure that the performance of all

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needed activities is held, so he or she had to demonstrate the critical technologies in work before starting the construction.

2. The adequate communication between the officials and the company. The contracting officer should have preserved the adequate communication and discussions with DOE in order to regulate safety and security requirements, which help avert cost increases and contract delays.

3. Requesting the audit. It was obligatory that the contracting officer requested the audit from specialists to perform it according to auditing standards.

4. Anticipating safety conditions. The government officials, the contracting officer in particular, should have accurately anticipated the site conditions or the types of activities which are necessary to conduct the work.

5. Organizing the schedule. The contracting officer should have ensured that the schedule, according to which the work would be done, was organized properly, including the dates of starting and finishing the construction, services and prices, etc.

Comparing the contract administration and project management of the National Nuclear Security Administration (NNSA) and the Office of Environmental Management (EM) and recommending how each agency could have improved its effectiveness in the areas of contract administration and project management

Two program offices within DOE—the National Nuclear Security Administration (NNSA) and the Office of Environmental Management (EM)—keep on experiencing significant problems which are connected with completing projects on time and on budget. There are several problems that are common for these offices. And they occurred

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as the result of inconsistent application of project management tools and techniques on the part of DOE and its contractors. It means “inadequate systems for measuring contractor performance, approval of construction activities before final designs were sufficiently complete, ineffective project reviews, and ineffective development and integration of the technologies used in these projects” (GAO, 2009).

Let’s have a look at and compare their work precisely. EM had cost overruns and project delaysdue to inadequate communication between officials on site and at DOE headquarters. Also, EM officials made schedule assumptions that did not correspond to technical or budget realities. Some of the EM projects caused the cost increases and schedule delays because “the previous baselines had not fully foreseen the type and extent of cleanup needed, assumed that construction projects needed to carry out the cleanup work would be completed on time, or had not expected substantial additional work scope” (GAO, 2009). Additionally, EM project officials did not accurately anticipate site or safety conditions and that’s why it resulted in cost increases and project delays.

NNSA had cost overruns and project delays because of poor management of the development and integration of the technologies used in the project’s designs. The other reasons why these problems appeared is that NNSA and DOE had not fully agreed on how NNSA should function within the department as its separately organized agency.

According to GAO, there were some areas in management which were due to be improved. As for project management, NNSA had to develop a project management policy, implement a plan for improving its project management efforts, or fully share

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project management lessons learned between its sites. Concerning program management, NNSA had to identify all of its program managers or train them to a certified level of competency. Finally, as for financial management, NNSA had to establish an independent analysis unit to review program budget proposals, confirm cost estimates, and analyze budget alternatives.

Taking into consideration GAO’s publications, in order to improve the effectiveness in the areas of contract administration and project management, such program offices as NNSA and EM have to make the following steps.

1. To conduct a risk analysis of the current project schedule using statistical

techniques;

1. to improve oversight of contractors and to strengthen accountability for

performance;

1. to demonstrate strong commitment and leadership;
2. to implement corrective measures;
3. to develop a corrective action plan that identifies root causes, effective solutions, and a near-term plan for implementing the solutions;
4. to have the capacity (people and resources) to resolve the problems and monitor and independently validate the effectiveness and sustainability of corrective measures. (GAO, 2009)

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References

D.C. Municipal Regulations and D.C. Register. (2012). Authority and duties ofcontracting officer. Retrieved from

GAO Testimony: “Contract and Project Management Concerns at the National Nuclear Security Administration and Office of Environmental Management”. (2009). Retrieved from

Office of federal procurement policy (OFPP). (1994). A guide to best practices forcontract administration.Retrieved from

Linda Harris(2003-2012). What does a contract administrator do? Retrieved from