This information and the accompanying matrix are designed to facilitate contract monitoring following the recommendations of the Texas Statewide Procurement Division (SPD) and The Texas A&M University System Contract Management Handbook. The intent is to provide a mechanism where clear expectations are established, followed by both the contractor and TAMU and to lead to successful contract performance, positive vendor relationships and to mitigate risk to Texas A&M in the event of unsatisfactory performance. For purposes discussed below, "contract" refers to either a signed contract or purchase order.
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 lower dollar value contracts may be highly complex in performance. The distinction of contract complexity risk depends on a number of variables and will require the departmental end user to apply independent judgement to assess the following conditions to their specific situation.
How to determine level of Contract Monitoring (how much risk is associated with a contract)
While the following cannot capture every element in every scenario, these parameters serve as a general guide to assess the level of required contract monitoring. Using the assigned numbers following each risk assessment description, then see the respective score categories below to identify contract monitoring processes:
| 1 | 2 | 3 | 4 | Score per Category | |
|---|---|---|---|---|---|
| Dollar Value $ | Delegated Spend | Delegated Spend to $100K | Over $100K | Over $1 million | |
| Payments | Fixed Price: One-time payment | Fixed Price: Interval payments | Cost Reimbursable | Performance based payment | |
| Complexity | Routine/recurring purchase and not critical use items | Routine/recurring purchase but mission critical | Complex but not mission critical | Complex project and mission critical | |
| Vendor | Regular | Frequent Use | Occasional | New Vendor | |
| Schedule | One-time or simple delivery | Frequent deliveries | Milestones/Phased completion/Dependent phases | New or innovative initiative | |
| Total Score | |||||
For a PDF that you can use for a calculating tool, please click here.
For example, an office supply order of regular used items ordered from the same vendor would score a "6" in the above five categories due to frequent deliveries which should be checked for accuracy (i.e. score 1 in all categories except "Schedule", where a 2 would be scored). On the opposite end of the risk spectrum, an RFP issued to identify a new vendor to outfit new technologies in multiple facilities with compensation tied to phased completion of equipment purchases and installation services could score a 3 or 4 in multiple categories.
Total Score
For all contract monitoring, it is imperative the TAMU personnel assigned to monitor the contract communicates with the appropriate vendor personnel to enable contract completion.
For a risk score of 5, monitor:
- delivery date
- confirm items align to specifications ordered
- confirm price and invoice
For a risk score of 6–10, monitor:
- interval or recurring deliveries
- timely delivery if mission critical
- new vendor performance
- pricing and invoicing align to contract terms
For a risk score of 11–24, monitor:
- Clearly defined expectations: if not specified in contract, establish in writing, confirm with vendor and retain with contract file.
- Clearly defined payment obligations: if not specified in contract, establish in writing, confirm with vendor and retain with contract file.
- Clearly defined milestones or phases: if not specified in contract, establish in writing, confirm with vendor and retain with contract file.
- Payments to vendor coincide with acceptable completion of objectives and/or milestones as deemed acceptable by TAMU.
- Any TAMU resources applied are assessed for appropriate application to the contract objectives
- Vendor performance is regularly reviewed and discussed.
- Phased objectives are reviewed regularly for target date completion.
- Mission critical endeavors should require regular updates with review and accountability conducted by TAMU personnel.
- Site visits are conducted as deemed appropriate to ensure vendor performance. Desk reviews of the project are regularly conducted.
Should vendor performance not meet expectations, it is essential that this be immediately communicated to the vendor, in writing, along with intended outcomes to remedy. This written communication should be followed with a meeting or call to outline possible resolutions and these actions should be established and agreed upon in writing. Generally, this will resolve the issue.
Should the vendor fail to address identified remedies in a reasonably established time, the TAMU personnel with contract oversight responsibilities should reach out to the Department of Contract Administration for further guidance.