(1) This section provides advice and assistance on how to appoint a Contract Manager and broadly what they should do. It supports the Contracts Policy and Contracts Procedure . (2) The Contract Manager may not perform every task described in the Procedure or this Best Practice Guidelines themselves, but they are responsible for ensuring it is done. The Contract Manager may authorise another staff member to perform particular functions, but remains responsible as Contract Manager. The Contract Manager may also have the right to delegate under VU's Delegations & Authorisations Policy . (3) A Contract must have a Contract Manager, but not more than one at any given time. (4) The person first involved in a Contract becomes responsible for that Contract and is the Contract Manager, unless and until another person is designated. (If the potential value of the Contract is outside their financial delegation according to VU's Delegations & Authorisations Policy, then a first Contract Manager must be appointed by a suitably authorised person). (5) Where a Contract is likely to be performed over a number of distinct phases or stages, a different Contract Manager may be appointed for each phase or stage. This means that the Contract Manager role and responsibility may shift from one person to another at different stages of the Contract lifecycle. (6) The Contract Manager should ensure their supervisor approves their status as Contract Manager. (7) The supervisor of the Contract Manager must make sure that the Contract Manager is a staff member proximate to the Contract at the business level, closely connected with the University project the subject of the relevant Contract, with appropriate skill and experience to carry out their responsibility as Contract Manager. (8) The Contract Manager may be someone in a specialist VU area with responsibility over a grouping of contracts (ie. VU's Procurement department has responsibility for all procurement contracts). (9) Once appointed, the name/position of the Contract Manager (or Contract Managers at different stages) must immediately be included in the Business Case . (10) This section provides advice and assistance for Contract Managers on how to properly plan before entering into a Contract. It supports the Contracts Policy and Contracts Procedure . (11) As a baseline, this Best Practice Guidelines and the Contracts Procedure should always be complied with. However, it is dependent on the risk as to what level of detail satisfies the requirements of the Procedure and Best Practice Guidelines. The Contract Risk Assessment Matrix provides guidance on how to assess the risk of the Contract and Undertaking. The more severe the consequences of the risk, or the more likely those risks will occur, then more rigorous evidence will be required to satisfy this Procedure and Best Practice Guidelines. If the risk is lower, then significantly less detail and documentation will satisfy this Procedure and Best Practice Guidelines. It is a matter of proportion, and the Contract Manager bears responsibility for making the decision about proportion. (12) When planning a Contract (before beginning to negotiate or draft the Contract) the Contract Manager: (13) This section provides advice and assistance for Contract Managers on how to perform a risk assessment before entering into a Contract. It supports the Contracts Policy and Contracts Procedure . (14) As appropriate, the Contract Manager should pro-actively research and identify the risks (legal, reputational, commercial or practical) to VU in conducting the Undertaking and entering into the Contract. (15) The Contract Manager should identify all practical measures that would mitigate or minimise those risks (whether through the implementation of specific processes or management, or other mitigation strategies). Please see the Contract Risk Assessment Matrix for guidance on how to assess the risk of the Contract and Undertaking. (16) As a baseline, this Best Practice Guidelines and the Contracts Procedure should always be complied with. However, it is dependent on the risk as to what level of detail satisfies the requirements of the Procedure and Best Practice Guidelines. The risk assessment should be reasonable and proportionate: the more severe the consequences of the risk, or the more likely those risks will occur, then the more rigorous and detailed the risk assessment should be. If the risk is higher, then more rigorous evidence will be required to satisfy this Procedure and Best Practice Guidelines. If the risk is lower, then significantly less detail and documentation will satisfy this Procedure and Best Practice Guidelines. (17) The Contract Manager should review and comply with VU's Risk Management Policy and Procedures and organize a risk consultation and assessment if appropriate. (18) The Contract Manager should understand and address any insurance implications and requirements. (19) Assessment of the risk should take place periodically throughout the contracting process and over the entire period of the Undertaking. (20) The responsibility for assessing the net risk and benefit to VU of an Undertaking, and deciding whether or not to enter a given Contract, remains with the person executing the Contract. (21) The party best placed to control the risk in a Contract or Undertaking (and therefore to prevent the risk from creating actual damage) is ordinarily liable under the Contract for the resulting loss. (22) This section provides advice and assistance for Contract Managers on how to draft the document called the " Business Case ", an essential record required as part of the due diligence process for every Undertaking involving a Contract. It provides instruction on how to assess and quantify the resources that will need to be committed, the timeframes, and the deliverables and KPIs, all with respect to a Contract or Undertaking. It supports then Contracts Policy and Contracts Procedure . (23) The Contract Manager should create an initial Business Case before beginning to negotiate a Contract. This is necessary for each Undertaking, and may be necessary for each Contract (unless it is part of a suite of Contracts dealing with a similar issue). (24) It is dependent on the risk of the Contract and Undertaking as to what level of detail in needed in the Business Case. The previous section advised how to perform an assessment of the risk using the Contract Risk Assessment Matrix for guidance. If the risk inherent in the Contract or Undertaking is higher, then greater detail is required in the Business Case. If the risk is lower, then significantly less detail and documentation is required in the Business Case. It is a matter of proportion, and the Contract Manager bears responsibility for making the decision about proportion. (25) Preparing the Business Case requires the Contract Manager to fully understand the nature of the Contract and Undertaking (including the resources that will need to be committed, the timeframes, milestones, targets, standards and deliverables) to ensure the Contract achieves the purposes for which it was developed. (26) The Business Case should be retained as an essential contracting record. (27) The Contract Manager should review the Business Case periodically throughout the Undertaking and update it as necessary to reflect changing circumstances. (28) The Contract Manager should ensure that the Business Case (and every update to it) is reviewed and approved by the person or people responsible for allocating the VU resources needed for the Undertaking to proceed. (29) The Contract Manager should provide the Business Case to everyone involved with the Contract and Undertaking. This includes to those VU specialty areas where advice is sought, to those deciding whether to enter into the Contract, and to the person executing the Contract. This is to ensure everyone fully understands the nature of the Undertaking, and can make an informed assessment of the benefit and risk to VU and the best interests of VU. (30) If any Undertaking constitutes a "commercial activity" under the VU Commercial Guidelines (in Part 6, Division 6 of the Victoria University Act 2010), then the Contract Manager should ensure that the Business Case and the due diligence process accords with the VU Commercial Guidelines as well as with this Procedure. (31) The Business Case can be a document (in any form) summarizing the key facts of the Undertaking, including: (32) As appropriate, all of the above key facts should be reassessed periodically throughout the contracting process and over the entire period of the Undertaking. (33) This section provides advice and assistance for Contract Managers on how to perform the essential due diligence process for every Undertaking involving a Contract. The due diligence process is performed to assess the other party's suitability as a contracting party. It supports the Contracts Policy and Contracts Procedure . (34) As appropriate, the Contract Manager should perform a Due Diligence Check before beginning to negotiate a Contract. It is dependent on the risk of the Contract and Undertaking as to what level of due diligence checking is required. A previous section advised how to perform an assessment of the risk using the Contract Risk Assessment Matrix for guidance. If the risk inherent in the Contract or Undertaking is higher, then greater due diligence checking is required. If the risk is lower, then significantly less due diligence checking is required. It is a matter of proportion, and the Contract Manager bears responsibility for making the decision about proportion. (35) The Due Diligence Check results should be retained as an essential record under VU's records management rules. (36) The Due Diligence Check does not have to be completed where the other party is generally regarded as being reputable and of sound financial standing. If this assessment is made, it should be clearly stated in the Contract Business Case with reasons why that assessment was made. (37) The Contract Manager should identify the correct legal entity that the University is contracting with. This can be determined using the other contracting party's ABN or ACN. Websites such as "ABN Lookup" and "ASIC" websites can provide basic details about the other contracting party. There may be different implications depending on the type of legal entity, which should be discussed with Legal Services . The Contract Manager should consider: (38) The Contract Manager should determine the financial stability of the other party. Credit Reports can be ordered and purchased from external credit agencies (ie. Dunn & Brad Street Report) through Financial Services . For larger, complex or riskier Contracts and Undertakings, it is important to know that the other party is financially sound and the small cost of obtaining these reports can provide some comfort. (39) The Contract Manager should evaluate the insurance requirements with respect to the Contract. If required, the Contract Manager should request copies of the Insurance Certificates of Currency from the other contracting party, and determine whether the insurance is adequate in the circumstances. These Certificates disclose the type and level of insurance cover held by the other party. These certificates are valid only for a defined period, so the Contract Manager should ensure that the other party provides evidence of any renewal of its certificate and that they are informed of any changes to insurance levels or insurance provider. The University's templates and insurance rules set out the minimum level of insurance required. The University risks being financially exposed if it deals with an uninsured contracting party and a dispute arises or losses are suffered. See the University's Insurance unit for further advice. (40) The Contract Manager should assess the reputation of the other contracting party. An internet (ie. Google) search may be sufficient to reveal any major issues or concerns such as financial difficulty, legal disputes, or poor business history. The University's reputation can be affected by being associated with a non-reputable party. (41) The Contract Manager should assess the track record and suitability of the other party to take part in this particular Contract or Undertaking with the University. Considerations may include the other contracting party's: (42) This section provides advice and assistance for Contract Managers on how to seek specialist advice from within VU about Contracts. It supports the Contracts Policy and Contracts Procedure . (43) The Contract Manager should involve, and seek advice from, all responsible parties in relevant VU specialist units to the extent of their specialization, regarding: (44) The Contract Manager should be aware that Undertakings can have significant lead times, or may be viable only if they are undertaken immediately. They should also be aware that all VU specialist units will have varying workloads and strategic priorities, which will impact their ability to control the timing of their input. (45) The Contract Manager should first review the information on the particular VU specialty unit's website. There may be a risk threshold that should be met before needing to refer a Contract to the VU specialty area (for example, only Contracts meeting a particular risk threshold need be referred to Legal Services, see below). (46) After reviewing the relevant website, the Contract Manager should next contact the specialty unit for advice. (47) When seeking advice, the Contract Manager should provide each specialty unit with the following, in advance and with as much lead time as possible: (48) Each VU specialty unit should promptly acknowledge receipt of the Contract Manager's request for input, and inform the Contract Manager if the preferred timeline needs to be amended. Each specialty area should try to provide their input so as to preserve and promote VU's ability to take advantage of opportunities. (49) Please see the websites of other VU specialist units and shared services for information regarding the advice they provide and how and when to contract them. (50) Legal Services provides advice as to the legal risks involved in an Undertaking, and ways to reduce or manage those risks in a Contract. The impact of the legal risks in any given Contract varies with the circumstances of each Undertaking. Without knowing the legal risks, anyone involved in negotiating and executing a Contract cannot be fully informed. (51) Only Contracts meeting a particular risk threshold need be referred to Legal Services for document review. It is dependent on the risk of the Contract and Undertaking as to whether legal advice is needed. A previous section advised how to perform a risk assessment using the Contract Risk Assessment Matrix for guidance. If the risk inherent in the Contract or Undertaking is above "Moderate", then the Contract Manager should seek advice from Legal Services and their review of documents. If the risk is lower than "Moderate", there is no need to seek advice from Legal Services - unless the Contract Manager is not certain about the risk assessment and the impact of the Contract or Undertaking. (52) If a Contract Manager is confident that they understand the impact of the Contract and Undertaking, and they consider the risks are acceptable to the University, they do not need to seek advice from Legal Services. This is a question of proportion, and the Contract Manager bears responsibility for their decision on this point. (53) Of course, no matter what the risk assessment threshold is, if a Contract Manager or anyone ever has a legal question, they can contact Legal Services. (54) Advice should definitely be sought from Legal Services where: (55) The Contract Manager should still follow all the steps described above in sections 1-6 of this Best Practice Guidelines and provide this information to Legal Services when seeking advice. (56) This section provides advice and assistance for Contract Managers on how to settle the Contract terms - meaning how to negotiate, and prepare or draft, the Contract. It supports the Contracts Policy and Contracts Procedure . (57) When negotiating a Contract the Contract Manager should ensure that they, and every other person acting on behalf of VU, conduct themselves in accordance with the principles in the Contracts Policy . These include: (58) The Contract Manager should ensure that the terms of the Contract are consistent with the principles contained in the Contracts Policy and, where applicable, the directions in any specialised contracting procedure. (59) The Contract Manager should review and if necessary revise the Business Case on an ongoing basis as the negotiation proceeds (the Business Case only becomes a finalised, historical document upon signing of the Contract). (60) The Contract Manager should: (61) Ensure that the Undertaking (including the nature of any services, the timeframes and the deliverables) are fully and unambiguously defined so that (if necessary) an outsider who reads the Contract can immediately understand what is going on, who is responsible for what, and could take over running the matter without needing to seek help. The deliverables should also be measurable and verifiable. (62) Ensure that the processes written into the Contract are feasible and practicable, such as aligning payments to milestones and allowing sufficient time for VU's internal processes to operate (ie. processing invoices). (63) The Contract Manager should determine the term (start and finish dates) of the Undertaking or Contract. Some Contracts contain options to extend their operation or term, and in such cases the term is calculated as follows: (64) Champion VU's rights and legitimate expectations and act in the best interests of VU. VU's rights and legitimate expectations should only be varied where it is reasonable in the circumstances. (For example, the following matters shouldn't need to be compromised: (65) This section provides advice and assistance for Contract Managers on how to execute or sign a Contract or deed. It supports the Contracts Policy and Contracts Procedure . (66) The Contract Manager is responsible for liaising with all contracting parties and relevant University staff to ensure the Contract is executed or signed properly and by the correct people according to VU's Delegations & Authorisations Policy (Contract Signatory) and that a Contract is in place before taking any action under the Contract. Contracts should not be completed retrospectively. (67) A VU officer may only enter into a Contract if the notional value of the Undertaking is at or below the maximum amount of their financial delegation, as detailed in VU's Delegations & Authorisations Policy. The Contract Manager should determine the "value" of the Undertaking or Contract. Undertakings may involve VU and other parties providing cash (or not), services or other "in-kind" contributions (or a mixture of them). The notional value assigned to these Undertakings (and documented in the Business Case) is that of VU's total contribution over the life of the Undertaking. (68) When having a Contract executed, the Contract Manager should ensure that: (69) When Contracts are executed as deeds the Contract Manager should comply with the Common Seal Regulation 2013 . (70) After having the Contract executed, the Contract Manager is responsible for complying with the University's records management rules in accordance with VU's Records Management Policy. The Contract Manager should: (71) Further information regarding recordkeeping obligations can be accessed on Record Services' website. (72) The Contract Manager should immediately ensure that any subsidiary agreements needed by the executed Contract are also prepared and executed (if this has not already been done). (73) This section provides advice and assistance for Contract Managers on how to manage and monitor the Contract after execution. It supports the Contracts Policy and Contracts Procedure . (74) As appropriate to the risk of the Undertaking, the Contract Manager should: (75) As appropriate, the Contract Manager must provide reports as required under VU's Risk and Compliance requirements and also to: (76) as necessary to keep them informed or to enable them to perform any obligation they may have with regard to the Contract or Undertaking. (77) This section provides advice and assistance for Contract Managers on what to do if there is a dispute. It supports the Contracts Policy and Contracts Procedure . (78) As soon as possible after a distressed Contract is recognised, the Contract Manager must provide written notice (which is also recorded in the appropriate Contract file or system) to: (79) When notifying others that there is a distressed Contract, the Contract Manager must include: (80) This section provides advice and assistance for Contract Managers on what happens when the Contract ends or is renewed. It supports the Contracts Policy and Contracts Procedure . (81) If the Contract is to end, and a new Contract be entered into with a different party for a similar Undertaking, the Contract Manager must ensure that transitional processes and arrangements are in place and are followed, such that VU suffers the least possible disruption. (82) Where the University or the other contracting party seeks early termination (terminating a Contract before all obligations under the Contract have concluded) then the Contract Manager must seek advice from Legal Services. (83) The Contract Manager must ensure all final administrative and operational arrangements have been taken care of at the end of the Contract. For example: (84) The Contract Manager must evaluate and review the Contract performance and experience and record some form of appraisal. This appraisal is to determine whether the University received value for money and whether the milestones, deliverables, outcomes or KPIs were met. Where an expectation was not met, the Contract Manager should document this in an attachment to the Business Case. The Contract Manager should also document any key lessons learnt from the Contract process or Undertaking in an attachment to the Business Case, and ensure this information is maintained or disseminated to the relevant University staff to ensure quality assurance.Contract Best Practice Guidelines
Section 1 - Make sure there is a Contract Manager
Section 2 - Plan for the Contract
Top of Page
Section 3 - Perform Contract Risk Assessment
Section 4 - Prepare a Contract Business Case
Section 5 - Perform Contract Due Diligence
Top of PageSection 6 - Obtain Specialist Contracting Advice
Obtaining advice from Legal Services
Section 7 - Settle the Contract Terms
Top of PageSection 8 - Execute or Sign the Contract
Section 9 - Manage & Monitor the Contract After Execution
Section 10 - What happens when there is a Dispute
Top of PageSection 11 - What happens when the Contract Ends or is Renewed
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This is not a current document. It has been repealed and is no longer in force.
This Contract Best Practice Guidelines supports the Contracts Policy and Contracts Procedure , and should be read in conjunction with them.