How to administer a contract

Contract managers should convene a meeting with the contractor, public authority representatives and stakeholders as soon as possible after the contract has been awarded. The meeting should: 

• ensure all parties have a common and clear understanding of their responsibilities and obligations 
• provide the foundation for a good working relationship 

Regular progress meetings should include: 

• key project team members and customer and contractor representatives 
• discussion on performance, upcoming events and milestones 
• proposed responses to changes in user demands or potential problems 
• technical discussions between knowledge experts to review data and reports  

Longer term reviews should take a ‘whole of contract’ perspective and include discussions about: 

• achievement of objectives 
• output versus budget 
• user satisfaction levels 
• value for money outcomes 
• extent that requirements are being met 
• emerging or anticipated needs for change 

Payments must be: 

• Made as per the terms and conditions of the contract  
• Generally made within 30 days of receipt of a valid invoice.  

The Treasurer encourages all public authorities to increase the use of purchasing cards. Supporting this, the Treasurer has endorsed a procurement strategy to resolve barriers to their use. Public authorities should review internal processes and strategies to maximise purchase card use. When selecting suppliers, consideration should be given to whether they accept purchasing cards.  

Public authorities must maintain records and documents to assist: 

• dispute resolution 
• meeting reviews 
• audits 
• planning subsequent contracts  
• adherence to relevant government supply policies. 
• ensuring supplier insurance cover is up to date 

Best practice recordkeeping includes a reporting system that provides all information needed to manage risks and achieve outcomes.  

Contract reports must be: 

• relevant 
• succinct 
• timely

Contract management must comply with Treasurer's Instruction 820 – Register of Contracts. This includes: 

• the scheduling and manner of contractor performance reviews 
• financial reporting to meet the needs of the contract manager, public authority executives and financial controllers 
• technical reporting to cover technical standards of reliability, safety and reporting criteria 
• contractual reporting on performance against specifications, resource allocation, costs and other contractor evaluations.

If procurement is subject to the Western Australian Industry Participation Strategy and advertised after 1 October 2018 then: 

• suppliers and agencies may be required to report on Participation Plan achievements 
• this reporting may occur even where granted an exemption from including the Participation Plan weighted criteria during the procurement process
• if the contract term is greater than 12 months, reporting will occur annually on the contract commencement and at the expiry of the term
• if the contract term is less than 12 months, reporting will occur once at its expiry

Public authorities’ records management must comply with the following legislation: 

• Financial Management Act (2006) 
• Freedom of Information Act (1992) 
• State Records Act (2000) 

Changes may become necessary during the contract period. Any variations to the contract need to be mutually agreed on by your agency and the supplier.  

All proposed contract changes must:  

• record the potential need for change in writing  
• consider full implications of change before amendments are made 
• involve parties with the authority to negotiate changes 
• record each step of the change action 
• incorporate any changes by a formal variation to the original contract 
• inform customers of changes

Contract managers must consider whether changes significantly alter the contract’s original scope.  Re-tendering may be required if the original scope is significantly altered. They must also be aware of the “contract creep” – the combined effect of multiple variations altering the original scope.  

To support government transparency, Finance’s Contract Variation Memo should be used when an agency varies a contract that leads to a price increase of: 

• $50,000 or more (above the original contract value recorded on Tenders WA) - the variation must be recorded on Tenders WA .
• $250,000 or more (above the original contract value recorded on Tenders WA) - partially exempt agencies must submit a contract variation memo to the Department of Finance. You can find your agency’s contact on the Agency procurement services contact list. 
• $5 million or more (above the original contract value recorded on Tenders WA). Partially exempt agencies must submit a contract variation memo to the State Tender Review Committee through the Department of Finance.