changes of specifications

Luqman+GWK and other forum members,
I 100% concur with the first submission from GWK to say that POOR CONTRACT MANAGEMENT is a problem in most of public procurement contracts. This has been revealed by various outcomes of auditing undertaken by CAG and PPRA.

Still the problem exist and it need more effort to the authority (PPRA) to have a smooth mechanism to eliminate such risks which has been identified during their auditing. The authority now should provide the comprehensive manual, guideline document for proper contract management and administration according to the nature, type of the procurement contract in respect to their contract values of which all PE's should at least 80% comply during the contract management. The Authority should put like benchmark mechanism in sense that issues of poor contract management has been identified during their auditing in such way that public funds has already spent in wrong way due to may be poor contract management of the PE with a poor technical know how or deliberately.

Even if you can take the severely punishment to the PE, it does not help because still there is no knowledge and skills to handle the contracts. Authority should go beyond of that to prepare such manual/guideline and train the user (PE's) like they are doing to disseminate the new PPA, PPR so as the people to have clear understanding what they have to do in contract management. Take example a certain PE has to implement the construction project, such PE has got ambition only to get the end results for either commercial building or whatever, Such PE have got no technical department such as QS, Engineer to advise them internally leave apart of employing the consultant. Such PE, is difficult to find that the project on hand is managed efficiently as expected. But if there is anything on hand to use it from authority and PE, is easy just to get the clarifications where they see in the guideline not clear and alike.

Literally, the Kraljic Model in supply chain management classify the way contract management strategies can be focused from the type and nature of item/or project by looking at the value expenditure of such item, supply risk/ impact to organization. For Example, looking at common use items (routine items, such as office stationery) compared to the construction project or procurement of software that will help and office for finance transactions and customer service in general.

Taking such example, the model says, you can not use the same effort/strategy to implement the contract from two procurement subject matter above. That's why we need something to guide us.

Back to the main point is that, my surprise from Luqman post is that what kind of contract was on hand of which have got no clear obligations of each part regarding to validity period of the contract. What type of contract do we referring to?, is it for Goods, works, services?. The thing here is to settle first the issue amicably to see where the issue went wrong. We can not blame directly the supplier without knowing the provision of contract obligations to each part. Yet in the contract, the better and good contract should have a provision of Contract Review whereby various issues are discussed and reviewed in joint meeting with Contract Management Team/Supervisor with that of the supplier or contract. Things like delay on the performance often discussed and reasons for delay earmarked and resolved.

For few comments, let me end here but we want to know some of issues I have pointed out above for critical discussion because this topic is very crucial to practitioner.

Luqman wrote:Dear GWK
Now i got your points and i can imagine how serious losses can result out of poor contract management by PE. Your input has enlighten me a lot.
thanks

Luguman,

It is true that PE may suffer serious losses out of poor contract management but in turn good performing contractor/supplier comes out of well customized tender and contract documents and adherence to procurement/contract execution procedures.

PPRA has posted all the necessary templates and guidelines and legislation on their web page www.ppra.go.tz . Every PE should make use of them to avoid harassment as pointed out.

Dear GWK
Now i got your points and i can imagine how serious losses can result out of poor contract management by PE. Your input has enlighten me a lot.
thanks

Lugman,

What i think is that the contract has been poor managed. Possibly PPRA solicitation documents were not used hence no provision for how the contract should be administered. Example provisions of Clause 24 of the general conditions of contract for general goods is how to deal with Delays in Supplier's performance before termination of contract. It tells what the supplier has to do if delay arises and what should be done by PE. Since those procedures were not implemented and the contract period has expired then the only provision remaining is to institute clause 26.2 (a) which states;
1. The Procuring Entity or the Supplier, without prejudice to any other remedy for breach of Contract, by written notice of default sent to the concerned party may terminate the Contract if the other party causes a fundamental breach of the Contract.

2. Fundamental breaches of Contract shall include, but shall not be limited to the following:
the Supplier fails to deliver any or all of the Goods within the period(s) specified in the Contract, or within any extension thereof granted by the Procuring Entity pursuant to GCC Clause 24

The challenge is "The contract entered with the supplier contain all the necessary provisions as contained in PPRA docs?" If no then a big problem

dear GWK and forum member
I have a concern on point 1 your raised in your contribution i.e that contract be terminated because of non perfomance. My worry is whether an expired contract can real be terminated or otherwise

dear GWK
thank you for your educative comments

with regard
Luqman

Lugman

In my opinion, the problem with the contract in discussion is POOR CONTRACT MANAGEMENT. This opinion is based on the provisions of PPA, PPR and the standard bidding documents which clearly indicates that contract can only be executed during contract validity period. Further more, the well compiled contract document must contain provisions of how the contract is going to be executed including advance payments and extension of contract period (ITT 43.2) (The PE were supposed to give an advance payment after receiving advance payment guarantee and performance security as stipulated in clause 9 of GCC for goods).

Therefore it seem to me that;
1. the supplier has breached the contract for non-performance hence should be terminated
2. The contract can not be amended since its validity has expired
3. Advance payment should be returned
4. The PE need to build its capacity in contract management skills to mitigate loses emanating from poor contract administration

I remain to learn from other forum members

dear all
kindly help on the following:
supplier X was awarded a contract to supply product Y. Supplier X requested an advance payment prior undertaking the works and PE paid the supplier, the requested amount. Before contract has been perfomed the contract expired. Later own supplier X shown the willing to perfom the contract regardless of the contract validity

I request member of the forum to assist on the follows:
1. Is it okay to accept the request of supplier to change specs on the signed contract
2. Is it okay to amend the contract under such circumstances
3. can we request the advance paid be returned because of non perfoming the contract?
4. The adviced specs are to the advantages of PE