Contract Management
Policy
2023
Policy
Contract Management
2023
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INFORMATION ABOUT THIS DOCUMENT
Document Record Number
Document Owner Chief Financial Officer
Document Development Officer Procurement and Contracts Co-Ordinator
Review Timeframe Within 12 months of election of new Council
Last Review Date
Next Review Date June 2025
Document History
Doc No. Date Amended Details/Comments
March 2023 Creation of Policy
Further Document Information and Relationships
Related Legislation*
Local Government Act 1993
Local Government (General) Regulation 2021
Government Information (Public Access) Act 2009
Related Policies
Code of Conduct
Procurement Policy
Related Documents
Local Government Code of Accounting Practice and Financial
Reporting (Guidelines), Update no. 23 – March 2015
*Note: Any reference to Legislation will be updated in the Policy as required. See website
http://www.legislation.nsw.gov.au/ for current Acts, Regulations and Environmental Planning
Instruments.
Policy
Contract Management
2023
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Contents
1. Purpose ......................................................................................................................... 4
2. Commencement............................................................................................................. 4
3. Scope ............................................................................................................................ 4
4. Definitions and Interpretation ......................................................................................... 5
5. Policy Statement ............................................................................................................ 6
5.1 Contract Negotiation and Preparation ......................................................................... 6
5.2 Contract Execution and Signature .............................................................................. 6
5.3 Contract Monitoring and Review ................................................................................. 6
5.4 Contract Close-out ..................................................................................................... 7
5.5 Contract Records ....................................................................................................... 7
5.6 Contract Management Training .................................................................................. 7
5.7 Mandatory Requirements for Applying to Contracts .................................................... 7
5.8 Ethics and Probity ...................................................................................................... 8
5.9 Role of Contract Manager ........................................... Error! Bookmark not defined.
Policy
Contract Management
2023
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1. Purpose
The purpose of the Contract Management Policy is to provide a clear and standardised
approach to managing and administering contracts for goods and services purchased
from suppliers.
The effective management of Contracts with suppliers is essential in maximising the
benefits and achieving its corporate objectives. These benefits can be summarised as
follows:
• Business Benefits:
Maximises outcomes to Council and our community (i.e. Council “gets what it is
paying for”) by managing supplier performance, maintaining quality, improving
productivity and identifying opportunities for improvement and innovation.
• Value for Money:
Enables savings and benefit opportunities identified during the procurement or
contract management process to be realised, whilst also ensuring the
achievement of expected procurement outcomes. It enables further benefits
through ongoing performance reviews, service improvements, supply chain
improvements, innovation, etc.
• Risk Management:
Reduces contractual risks through the robust contract management practices.
Ensures Council is also aware of, and complies with, its own contractual and
legislated obligations.
2. Commencement
This Policy is effective from the date of resolution by Council and shall remain in force
until repealed by resolution of Council.
3. Scope
This Policy commences in the Post-Contract-Award stage of the Procurement
Lifecycle. The Pre-Contract Award stage is covered by Council’s Procurement Policy.
This Contract Management Policy applies to all Council staff and contractors that are
involved in the management of supplier Contracts on behalf of Council.
This Policy applies to all Contracts and any other documents that create legally binding
obligations on Council for the procurement of goods, services and works which may
include procurements which are simple in nature and low risk. Further, it applies to a
Contract until all contractual obligations have been completed.
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Contract Management
2023
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The following are excluded from this Policy:
• Employment contracts,
• Non-binding Memoranda of Understanding,
• Partnering and collaborative contracts with other Local or State Government
organisations.
4. Definitions and Interpretation
Term Meaning
Contract An agreement, exchange of letters, heads of agreement, deeds
of agreement, binding memorandum of understanding, response
to tender, grant application, trust deed and any other document
which create or which may create binding obligations on Council
and on the other party / parties to the contract.
Program
Manager
The responsible officer (usually a Senior Manager) for
overseeing the contract and any major contractual changes and
strategies. The Program Manager or Director (owner) appoints
the Contract Manager.
Contract
Management
Refers to all activities at the commencement of, during and after
the contract period, to ensure that all contractual obligations
have been completed.
Contract
Owner
A Council staff member who is ultimately accountable for the
outcomes of the contract, usually the Director or Manager with
the Financial Delegation. The Contract Owner approves contract
variations including extensions, as well appoints the contract
management roles.
Contract
Manager
A Council staff member nominated to be responsible for the
management of the administration and management of a
contract.
Contract
Variation
Is an addition or alteration to the original contract and may
include a change to the scope of the contract, value of the
contract, the contract options to be exercised, contract prices
and quantity purchased.
Contractor The supplier or the service provider (the other party) under a
contract.
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Contract Management
2023
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Value of a
Contract
The value of a contract is whichever of the following values (incl.
GST) is appropriate to the kind of contract concerned:
The total estimated value of the project, or
The total estimated value of the goods or services over
the term of the contract, or
The value of the real property transferred, or
The rent for the term of the lease.
Contract
Register
The schedule of permitted agreements valued over $150,000.
5. Policy Statement
The Liverpool Plains Shire Council is committed to ensuring that all contracts are
managed in a manner that is transparent, accountable, and consistent with Council’s
policies, procedures, and guidelines. The purpose of this policy is to establish a clear
framework for the management of contracts entered by Council, with a focus on
ensuring that Council’s interests are protected and that all contracts are managed
effectively and efficiently.
Council will ensure that a clear and comprehensive process is in place for the
management of contracts, including the following steps:
5.1 Contract Negotiation and Preparation
Council will ensure that all contracts are negotiated and prepared in accordance with
Council policies and procedures, and that all necessary approvals are obtained before
contracts are executed. Council will also ensure that contracts are prepared in a
manner that protects Council’s interests, and that contracts are clearly and concisely
written to minimise the risk of disputes.
5.2 Contract Execution and Signature
Council will ensure that contracts are executed in accordance with Council policies and
procedures, and that the contracts are signed by authorised representatives of Council
and the relevant parties. Council will ensure that contracts are executed in a manner
that protects Council’s interests and that contracts are executed in timely manner.
5.3 Contract Monitoring and Review
Council will monitor contracts regularly to ensure that they are being performed in
accordance with the terms and conditions of the contract. Council will also conduct
regular reviews of contracts to ensure that they are still in line with policies and
procedures, and that they continue to meet Council’s needs.
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Contract Management
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5.4 Contract Close-out
Council will ensure that the contracts are closed out in accordance with policies and
procedures, and that all necessary documentation is completed and filed appropriately.
Council will also ensure that all outstanding issues and obligations under contracts are
resolved before contracts are closed out.
5.5 Contract Records
Council will maintain accurate and up-to-date record of all contracts entered into
including contracts that have been executed, are in force, or have been closed out.
Council will also ensure that all the contract records are stored securely and that they
are easily accessible by authorised personnel.
5.6 Contract Management Training
Council will provide training to all personnel involved in the management of contracts,
including training on policies, procedures, and guidelines, and on contract
management best practises.
5.7 Mandatory Requirements for Applying to Contracts
The following minimum requirements apply to all Council Contracts valued at $150,000
or more. However, Council will move to apply these requirements to all contracts
regardless of value.
5.7.1 Staff must adhere to Council’s procurement policies, procedures and
processes.
5.7.2 Each contract must be registered and identified with a Contract Number
and the contract stored in Council’s electronic data management system
(Content Manager).
5.7.3 Specific contract details must be entered into Council’s Contracts Register.
5.7.4 A Contract Manager must be appointed. The Contract Manager may
manage a contract valued at more than their level of financial delegation.
However, the Contract Manager must not approve or incur expenditure on
goods, services or a project valued at more than their level of financial
delegation. Note, this also applies to any changes (variations) to the
original price of procurement.
5.7.5 Council developed and recommended Contract Templates should be used.
5.7.6 All Contracts must include appropriate Sustainability clauses in the areas of
Work Health & Safety; Quality Assurance; Environmental; Financial
Capability; Insurance; Industrial Relations; Performance; Code of Conduct;
Business Ethics; Exchange; and Disclosure of Information. That allow and
support contract compliance and risk management, with having regard to
project value, requirements and complexity.
5.7.7 All Contracts must include appropriate commercial clauses in the areas of
Payments and Retentions (or security); Price Adjustments; Delay to
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Contract Management
2023
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Completion (or delivery); and Processes to Resolve Claims and Disputes.
That allow managing or regulating variations to the original Contract, having
regard to project value, Contract requirements and complexity.
5.7.8 Obtain all relevant approvals and licences prior to commencement.
5.8 Ethics and Probity
Council’s Code of Conduct must always be adhered to in the management of
Contracts on behalf of Council, ensuring responsible decision making, declaring and
appropriately managing any conflicts of interest and appropriate decline of any offered
gifts or benefits.
