Contract & Project Management

Sound execution of contracts with regard to quality, costs, terms and scope of work sets the foundation for success of our company Una Consulting Ltd. Bihać. Understanding the project as a time-bound effort undertaken to create a unique product, service or result, Una Consulting Ltd. has put in place and practice project management policies and practices ensuring that knowledge, skills, tools and techniques are applied to fulfil project’s requirements and achieve expectations.

The outline of contract and project management process and accompanying diagram are given below.

I          Signing of Contract

Before being concluded and becoming final, the contract is carefully reviewed to verify that:

  • Tasks, capacities and time frames are properly defined;
  • General and special conditions in the contract are specified;
  • Prices / fees and payment terms are defined as agreed;
  • Taxes, exchange rates, price increases and other factors that may affect the price are taken into account;
  • Rules, standards, specifications and regulations are specified in the contract;
  • Quality-related requirements are determined and clarified;
  • All preconditions, third party expectations and involvement are identified;
  • Project risks are recognised and mitigation measures are identified;
  • Any specificities regarding a particular project/contract are taken into consideration.

II         Contract Management and Project Scope Management

Once the contract is signed, Project Implementation Team (PIT) including Project Manager (PM) is officially appointed by the Una Consulting Director. Very often, the assigned PM was already involved in the preparation of the Offer so s/he is well-familiar with the scope of work. The PIT is principally accompanied by a young water expert / professional i. e. new staff member who will be using this opportunity to develop his/her capacities for contract management and implementation.

The first task of the PM is to study the contract documentation, which consists of, but is not limited to general and special conditions of the contract, Terms of Reference (ToR), Offer (which includes staffing schedule, implementation plan, scope of work, financial offer, etc.) and annexes such reporting forms, visibility rules, etc. In case that any of documents from the Offer is changed either in the Inception Phase or during the execution of the contract, it needs to be agreed upon by both parties and documented to become valid. In case the change affects the scope of work, deadlines or value of the contract, it must be regulated by an annex to the contract.

Implementation of project activities sometimes requires the engagement of external experts or service providers. In case a wide-scope services are needed, a ToR is developed by the PM and/ PIT member and offers from at least two different service providers must be collected. In case a limited services are needed, obligations and terms are defined through contracts. The PM prepares or delegates the preparation of sub-contracts, which are verified by a lawyer and Finance Manager (FM) whilst the sub-contracting procedure is approved by the Director.The PM monitors the execution of the sub-contracted services or tasks, evaluates them and approves payment. The payment procedure and closure of the sub-contracts is carried out by the FM upon the approval of the Director.

III       Project Dynamics and Deadlines

Time management is one of the key project management processes. Hence, after signing the contract, the PM reviews the dynamic plan against the date of signing the contract and, if dates do not correspond to the planned timelines, seeks the approval from the Client in writing or at the initial meeting where the minutes will be kept as a formal approval.

Based on the verified / approved deadlines and contract documentation, a short-term scope of work is defined in line with priorities / packages / deliverables / tasks and short-term action plan with deadlines and staff allocations is developed. Depending on a size of the project and contract, short-term planning is done on monthly or quarterly basis. Such planning enables the PM to know, at all times, status of the implementation and to timely identify potential obstacles and delays. In case delays are caused internally because of e. g. employee overload, lack of resources, etc., the PM will inform the Director to coordinate removing of obstacles. If delays are external, such as late submission of data by project partners, the PM will inform the Client and seek, in time, its support in preventing the delay or, if the delay could not be prevented, seek its approval for deadline extension. This forms the basis for annexing the contract with regard to the contract deadlines.

All PIT staff must be fully acquainted with short-term plans, which is also presented to the Director. Short-term plans are PM's tool and they are used for internal PIT meetings whilst dynamic plans from the contract are used for meetings with the Client.

IV       Quality Control Management

Internal quality control, which is appointed by the Director, develops the Quality Control Plan (QCP) together with the PM, that will set procedures and activities aimed at delivering services and products that meet quality objectives as stated in the contract documents. The QCP is based on project activities, deadlines, resources and quality requirements and includes, amongst others, criteria that will be monitored and evaluated, schedule of control and observations including improvement measures, if necessary. Moreover, the PM is obliged to review all documents before they are submitted. The rule is that no document may "come out" until it has been reviewed by at least two competent employees.

V         Payment and Budget Management

Payment schedule is typically defined by the contract; it is based on (1) deliverables such as study, report, document, etc. or (2) working days / hours (e. g. supervision over the execution of works, etc.).

When the payment is based on deliverables, Client's official notification on receiving/approving the deliverables is obtained and serves as a basis for invoicing. When the payment is based on working days / hours, records of working hours / days need to be submitted. The PM controls and reconciles, archives the signed versions of the records and submits them to the FM for invoicing. The form for recording working days / hours is sometimes given through the contract, and in case it is not, templates are available in the company's archives.

Other costs such as travel and accommodation costs, hiring external service providers, etc. are also monitored and recorded. The PM controls incoming invoices, approves them with signature and submits them to the FM for a payment who controls the content of an invoice and stamps it with “paid” stamp once the payment is executed. For better control a secretary is in charge of cash payments, the FM is in charge of bank payment and control of cash payment and the external bookkeeper controls collects all financial documentation and controls it.

In case a project has its separate budget, the PM must ensure that expenditures are in line with the budget. The payment management responsibility is with the PM. To this end, s/he may use the internal payment monitoring tool, which is a simple-to-use Excel table in which number of expected payments, due dates, reminders, date of payment, days of delay in payment (if any) are entered. The payment dynamic is a part of internal monitoring and reporting.

In case of changes in the payment schedule, the PM informs the FM and, if necessary, the Director, and these changes are formalized through negotiations with the Client, first orally and then in writing. These changes may also be subject to annexes to the existing contract. Closing of the contract is possible only after the final payment has been made.

VI       Reporting

Reporting requirements are typically defined in the Contract and ToR. Responsibility for reporting lies with the PM. In case of larger projects when more employees contribute to reporting, the PM makes the schedule and assign the reporting function to project team members, harmonizes the process and controls the report.

Internal reporting is done in agreement and at the request of the Director. The internal report could be done in writing, in a free-format, or verbally, as agreed.

VII      Communication

Scope and extent of project communication depends on its size, objectives, number of participants / stakeholders, etc. and could be internal and external.

Internal project communication may be towards the Director and PM and/or could be operational amongst the PIT. It takes place through internal meetings whose frequency, objectives, duration and participants is determined by the PM. It also takes place via e-mail messages, telephone, mobile phone, social networks and other means of communication that are currently available. The method of communication is agreed at the first PIT meeting.

External communication towards the Client is the responsibility of the PM, who may, if necessary, request that this role be taken over by the Director or one of the PIT members or engaged experts, depending on the nature and need for communication. External communication takes place through meetings whose dynamics are agreed at the beginning of the contract execution where it is also agreed who is responsible for preparing and moderating meetings, making minutes of meetings, etc. Communication can also take place via e-mail communication; however, at the beginning of the contract, it is necessary to confirm with the Client whether e-mail communication is considered official or unofficial communication. Even when e-mail communication is accepted as an official means of communication, the company's rule is that any serious address to the Client regarding contractual obligations is communicated by letter. Any hard copy document coming in or out is recorded in the mail protocol kept by the secretary.

External communication also includes communication with external associates and communication with media and public. The PM is authorized to maintain this communication. In case communication goes beyond the scope of PM’s competence for the project / contract / service, the PM seeks the authorization of the company or refuse the communication.

VIII    Documentation and Archiving

This process is closely related to knowledge management. From the preparation of offers to the provision of services, no two jobs or contracts are the same; yet, many of them are similar or have similar elements. If the documents and processes are documented properly and regularly, it will help the same or another team to organize and implement a similar contract more efficiently and straightforward. However, if documents and processes are not properly documented, institutional knowledge is lost which results in more time and reiteration of actions and processes, which is also financial loss.

Documenting the contract management process is one of the key responsibilities of the PM who could delegate this task to another PIT member, but must monitor how it is implemented. Una Consulting Ltd. developed clear instructions on how to structure, locate and process the project documents in folders, which follows good practices of our foreign partners and is based on ISO standards.

IX       Staff Changes

In case the PM or any PIT member needs to be replaced for whatever reason, a new person of equal or higher expertise is proposed to the Client. Upon approval, new PM or any PIT member is appointed officially by the Director. All contract documentation is then submitted to the new PM and transition time allowed for the new PM / PIT member to be introduced and in full control of the contract and the project. Key aspects of the handover are:

  • Contacts (project directory and key stakeholders and contracting parties),
  • Status of implemented and not implemented activities,
  • Dynamics, key deadlines,
  • Changes that are recorded in the form of letters or annexes, and may serve for some changes in the contract,
  • Staff and their roles,
  • Executed collections and receivables, budget status,
  • Reporting status, sample reports and required forms,
  • General: specifics, experiences and good practices gained during the so-far project management,
  • Project archives and documentation, including key correspondence.

X         Closure of Contract

The formal closure of the contract is often undermined, which results in the archive not being complete, final payment not sent in full, certificate of good performance not obtained, etc. The following activities therefore are implemented to ensure full and proper closure:

  • Review the project archive – upload necessary and delete unnecessary documents and versions,
  • Obtain a certificate of good performance from the Client,
  • Financial settlement – final invoicing and its payment,
  • Prepare or update reference on successful contract completion,
  • Prepare web news.



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