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What is the Difference Between Contract Administration and Contract Management?

Many people use Contract Administration (CA) and Contract Management (CM) interchangeably.  However, in my opinion, they are very different.  There is not necessarily a correlation between the title of Contracts Administrator and Contracts Manager.  Titles are simply titles.  I am referring to someone’s skill level and how he/she performs his/her job.  CA is reviewing a singular document (i.e. a contract modification) at a time.  CM is understanding the company’s portfolio of contracts and culture including concerns, issues, and sensitivities.

Before agreeing to perform CM, these are questions essential to ask:

  • Input from the CEO, COO, and CFO: What are the company’s pain points?  What is the company doing well (pertaining to CM)?  What would you like to see improved?  Are you getting the financial results out of each contract that were bid?  If not, does the company know why?  What are the company’s main concerns in terms of Teaming Agreements or Subcontracts other than workshare (e.g. Intellectual Property, Limitations of Liability, Arbitration etc.)?
  • Input from the Project Manager/Program Manager: From a CM point of view, what is the most challenging aspect for you?  Some answers may be tracking the funding or hours, keeping track of deliverable timelines, the differences between doing work for the Government versus the commercial sector, how to purchase Other Direct Costs (ODCs), understanding the Federal Travel Regulation (FTR), etc.
  • Review the Contracts and Subcontracts: What is the history of the contracts and subcontracts?  Rarely are all the modifications error-free in which case a new modification needs to be requested to make corrections.  Does the company have all of the modifications?   If not, of course, missing modifications need to be requested.  Does the company have all of the attachments with the Contracts?  If not, of course, they need to be requested.  Is the PM aware of the attachments and their relevance?

On a monthly basis:

Ask the CFO/Lead Accountant about any financial issues. What is the status of funding and usage?  Do any of “Limitations of Funds” letters need to be prepared?  Are the invoices getting paid on-time?  Would an Estimate at Completion (EAC) [that includes projections] be helpful?

On a weekly basis:

Check in with the Project Manager/Program Manager: How is the contract going?  What issues are you having, contractually?  Has the Contracting Officer Technical Representative (COTR/COR) given specific instructions that only the Contracting Officer (CO/KO) has the authority to do?  If so, it needs to be confirmed with the CO/KO in writing.

In addition to  the obvious requirements such as understanding the FAR/DFAR and the various contract types for effective CM, other important aspects are communicating with all the stakeholders, analyzing each contract and the entire portfolio of contracts, and being able to project and proactively plan.

Contact Streamline to find out if a contract management expert is what your organization needs.

This blog is for informational purposes only. None of the content is, or will be deemed to constitute legal opinions or legal advice.

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