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7 Contract Management

7.1 Ongoing contract management

The ongoing management of the contract needs to be covered by providing for appropriate annual reviews.  Solid reporting and audit programmes are essential if reviews are to be undertaken successfully.  Any change to the scope of services that may be required as a result of a review must be allowable for under the contract.  Changing the scope of services after a review needs to be balanced against the cost of implementing any changes and the ability to increase budgetary provision.

In addition to managing the contract, it is important to maintain a good relationship with the contractor.  Often the time required for this is underestimated by the principal, especially at the beginning of the relationship.  It is important that both parties be committed to growing the relationship for mutual benefit.  A good relationship will achieve better outcomes from reviews and encourage innovation.

7.1.1 Reporting

When developing the contract, a structure for meeting and reporting should be included.  You will need to specify reporting and deliverable requirements and their timeframes.  These usually include a number of mobilisation tasks, followed by annual updates for plans and monthly reporting of trends, tonnage, health and safety, customer complaints, and any other issues/ information that the contractor or council’s representative may wish to discuss and record.  It is important that data on waste and recycling be comprehensive and accurate for contract administration purposes, waste management planning and long term planning.

Data should be collected in the format that best meets the requirements of the council.  However, there is also an argument for standardising the format into a national format for ease of comparison and the collation of national statistics.  Councils should, where possible, collect data in a format that is easily collated for national reporting.  The Ministry for the Environment is working to strengthen the reporting requirements and standardise the reporting format for waste to improve the availability of information.

7.1.2 Audits

Audit programmes to ensure contract requirements are being met are common practice.  Further specialised audits are also available, including the Solid Waste Analysis Protocol 2002 and participation rates for services.

7.1.3 Innovation and technological changes

Innovative approaches to contract service provision, and the ability to include these and beneficial technological changes during the term of the contract, should be encouraged.  This can be advantageous to both parties, especially during long term contracts.  Examples of situations where this may occur include:

  • either party wishes to increase the type of recyclable materials collected/sorted
  • sharing of investment in market research and technological changes for plant
  • other innovative approaches to handling waste or recyclables.

7.1.4 Performance review

KPIs are the critical measures in a review of performance (see section 6.4).  Contracts that provide for an extension of the contract term usually contain performance review criteria, against which the decision whether to renew the contract or not is made.  These are usually linked to contractor performance over recent months, as assessed by the KPIs, and other matters which council has set down in the contract as parameters for the review.  The purpose of the review is to review performance and, if necessary, improve it.  The purpose is not to mark the contractor down merely to save money.  It is common for the council to reserve the right to renew the term of contract at their sole discretion.

7.1.5 Role of consultant as client representative

The role of the engineer’s representative, the council representative, the contract representative and the client representative is sometimes undertaken by a consultant engaged by the client.  The name of the client’s contract representative should be highlighted in the contract document.  For further clarity, the roles and responsibilities of all stakeholders can be outlined in the contract document.