The Contracting Office (CO) will follow the guidelines set forth in the Contracting/Purchasing Accountability and Risk Analysis Procedure and complete the Institutional Policy for Contract Performance Monitoring form. The CO will perform an initial risk assessment of all foreign contracts, all information technology contracts greater than $50,000 and all contracts that are greater than $100,000.
This procedure is designed to facilitate contract monitoring as required by Texas Education Code § 51.9337 and the Texas Tech University System Contract Management Handbook. The intent is to provide a tool to establish clear expectations for the contractor and Angelo State University (ASU) to follow so that positive vendor relations are formed while mitigating the risk of unsatisfactory performance to ASU and to lead to successful contract performance by the contractor.
Not every contract requires the same degree of monitoring, but a healthy approach is for the level of contract monitoring to mirror the level of contract complexity and/or contract risk. Since the goal is to monitor for successful outcomes, many variables must be considered. For example, certain contracts will have higher dollar values, but will be simple in performance while some contracts will have lower dollar values and be complex in performance therefore requiring more in-depth monitoring. The complexity risk for each contract depends on a number of variables, such as type of service or integration with other systems.
The CO serves as the Contract Manager (CM) and the department end-user serves as the Contract Administrator (CA). The CM and the CA will work together to develop a contract monitoring plan for certain contracts assessed as requiring a monitoring plan. Per OP 30.03, a department CA must document their primary post-award responsibilities and notify the CM of contractor performance. The CM and the CA will customize the monitoring requirements for contracts that meet the criteria for an enhanced monitoring plan.
In May of each year, the CO will request that a CA complete a vendor performance forms for certain contracts. It is the CA responsibility to evaluate a contractor’s performance throughout the contract term and notify the CO of any potential issues, such as poor vendor performance, inaccurate billing, etc.
The CM will discuss the contract risk assessment with the CA to determine the type of monitoring that will be required. There are two types of contract monitoring plans:
Routine Monitoring: The CA is required to complete the vendor performance form on an annual basis upon request from the CM. The CA must notify the CM of any potential issues prior to and after completion of the vendor performance form.
Enhanced Monitoring: Any contract that has a total term equaling less than $5,000,000 that is determined to have an identified high risk factor will be placed on an enhanced monitoring plan to include monitoring vendor performance, deliverables, and invoicing. All contracts that have a total term equaling $5,000,000 or more will automatically be placed on an enhanced monitoring plan. The CM will request that the CA complete a vendor performance form and provide other documentation as requested. The CM will review the results of the annual enhanced monitoring plan, complete the Enhanced Contract Monitoring Checklist, and will discuss with the results with Vice President for Finance and Administration (VPFA). The VPFA will determine whether or not results warrant completion of the Report Form(s) for Contracts Requiring Enhanced Contract Monitoring under $1,000,000, >$1,000,000, or >$5,000,000, and will submit the completed form to the Board of Regents at the next Regent’s meeting.
If applicable, contract monitoring plans may include:
The TTUS Contract Management Handbook addresses criteria to consider when deciding on monitoring tools. These include:
- Site Visits – Contracts that are complex or have a high degree of risk may require visits to the contractor’s facilities. Site visits may be used to verify that the contractor’s performance complies with the contract schedule or other requirements.
- Periodic Business Reviews – Formal, face-to-face business reviews should be schedule at appropriate intervals (quarterly, semi-annually) to assure that contractor’s performance is discussed. These reviews should have a formal agenda that specifically addresses all identified areas of risk, as well as discussion of opportunities for improvement that have been identified.
- Desk Reviews – A desk review includes a review of reports submitted by a contractor to the University. Criteria for items that require reporting by the contractor should be included in the contract monitoring plan.
- Expenditure Document Reviews – An expenditure document review includes analysis of contractor invoices to determine (1) if the fee rates and expenditure items are permitted under the terms of the contract, and (2) if the supporting documentation adequately supports the invoice.