Dan Gordon, administrator of the Office of Federal Procurement Policy, has announced a range of initiatives to improve contract management practices between suppliers to the US Government and the way that Government Agencies administer and manage contract performance and obligations.
“Contract Management is front and center in our focus”, Gordon declared at a recent meeting on procurement reform. Gordon and the Obama administration intend to root out negligent behavior in government acquisition by having agencies better manage the contracts they award.
“A company will no longer get a contract and then never again hear from the agency about the work”, Gordon said. “Further the government won’t turn a blind eye toward schemes or well-known shady business partnerships”.
There are many examples of poor contract management practices in Government and organizations like the Project on Government Oversight (www.pogo.org) have made a significant impact in raising awareness of the need to not just negotiate contracts with third party suppliers, but also to track performance and monitor compliance to contracted obligations once the contract has been signed.
As contracting becomes more complex and more litigious (a recent study by Fulbright and Jaworski showed that the majority of corporate litigation matters now arise from contract-related disputes), it is crucial to keep track of what has been committed to in a contract.
The old world of throwing more resources at the problem of contract oversight will not work anymore. Qualified contract management resources are hard to find and manual tracking of contract milestones and obligations was too error-prone anyway. What is required is a balance of technology solutions that support the contracting process and human oversight to enforce contracted terms and conditions.
Choosing the right technology solution is critical. Many Finance or ERP based contract database solutions fail to realise that government contracting demands automation and control at every stage of the contracting process from the creation of the contract, through to the tracking of obligations and the tracking of vendor performance.
Some contract management software solutions, like Dolphin Contract Manager, automatically integrate with the Federal Acquisition Regulations (FAR/DFAR) list and allow government procurement managers to efficiently create contracts and ensure that commitments and obligations are effectively managed once the contract has been executed.
We believe that true transparency in government contracting can only be really achieved when you have total control over your contracts and obligations. It is time for government agencies to embrace technology solutions to help them to achieve this.