Contract Management - Public Buying


Contract Management , usually referred to as Project Execution means monitoring and completing a project as per the terms and conditions governing that Contract.

Thus, Contract Management means progressing a contract to ensure timely completion of all the specified jobs and work as per the terms and conditions incorporated in the contract

The essential requirement for ensuring trouble free contract management is placement of contract with transparent terms and conditions which have already been agreed to by both the purchaser and the supplier in writing.

After placing a contract ,  obtaining the suppliers' unconditional acceptance of the contract is the first step

All the functionaries named in and / or directly connected with a contract are to play their roles in terms of the contract. Such functionaries , apart  from the contractor , may be the contract operating /executing authority , paying authority etc.

The purchaser is to watch and review the work of all such functionaries to avoid any slippage or bottleneck in the progress of the contract

The purchaser is also to locate the key areas of a contract for special watch

Many a time, even a properly concluded contract may need modifications and amendments due to negligence and inaction of the supplier and / or the purchaser in handling the contract or due to some genuine unforeseen reasons

Any amendment issues to a contract may have :

  • Commercial impact and / or TECHNICAL IMPACT AND/OR
  • Financial impact and / or
  • Legal impact on the contract

To avoid any future complication, the purchaser should examine all such issues thoroughly before issuing any amendment

The most frequent amendment asked for by a supplier is extension of delivery schedule of contract.

Depending on the merits of the case and when ordered good are still needed, the following three broad techniques are adopted for extending the contractual delivery schedule :

1) Extension of delivery period without imposing any liquidated damages but denying any increase in the cost and and at the same time , availing of the benefit of any lower trend in the price of the ordered goods.

2) Sometimes , the delivery period of a contract expires without any supply or with part supply and the supplier does not request for delivery extension but the purchaser needs the pending ordered goods In such a case, performance notice may be served on the supplier. The conditions incorporated in a performance notice are similar to those as incorporated in
a delivery extension letter with imposition of Liquidated damage and reservation of rights and denial clauses

3) Sometimes, suppliers ask for amendments to the specifications of the contracted goods. This usually happens in Turn key contract an contracts for industrial plants. While examining such an issue on merits, the purchaser should also ensure :

  • Modified specification not substandard
  • The utility , performance and efficiency of the goods in question are not affected
  • Purchaser does not face any Financial repercussion
  • The supplier does not gain at the cost of its competitors, whose offers were rejected while deciding the contract in favour of this supplier

Appropriate administrative as well as legal safeguards are incorporated in a contract to tackle various complications during the tenure of the contract. Some such provisions are:

  • L.D. clause
  • Performance security clause
  • Force Majeure clause
  • Warranty clause
  • Termination for default by the supplier
  • Termination of contract for the convenience of the purchaser
  • Applicable law governing the contract
  • Settlement of disputes
  • Through sole arbitrator appointed by the purchaser
  • In accordance with Indian Arbitration and conciliation act, 1996
  • In accordance with UNcritical or ICC arbitration rules
  • Through court of law of competent jurisdiction







Transparency in Public procurement
Acceptable Supplier / Offer
Single Tender Enquiry (STE)
Limited Tender Enquiry (LTE)
Open Tender Enquiry (OT)
Global Tender Enquiry (GT)
Procedure For Tender Evaluation
Reasonableness of Price
Contract Management