Organizational Process Asset Updates

Organizational process assets updates consist of organizational policies, procedures, and so on. Three elements of this output relate to contracts:

Correspondence Correspondence is information that needs to be communicated in writing to either the seller or the buyer. Examples include changes to the contract, clarification of contract terms, results of buyer audits and inspections, and notification of performance issues. You'll use correspondence to inform the vendor if their performance is unsatisfactory. If they don't correct it, you'll use correspondence again to notify a vendor that you're terminating the contract because performance is below expectations and is not satisfying the requirements of the contract.

Payment schedules and requests Many times, contracts are written such that payment is made based on a predefined performance schedule. For example, perhaps the first payment is made after 25 percent of the product or service is completed. Or maybe the payment schedule is based on milestone completion. In any case, as the project manager, you will verify that the vendor's work (or delivery) meets expectations before the payment is authorized. It's almost always your responsibility as the project manager to verify that the terms of the contract to date have or have not been satisfied. Depending on your organizational policies, someone from the accounting or procurement department might request written notification from you that the vendor has completed a milestone or made a delivery. Monitoring the work of the vendor is as important as monitoring the work of your team members.

If the procurement department is responsible for paying the contractor, then that department manages the payment schedule (which is one of the terms of the contract). The seller submits a payment request, an inspection or review of their performance is conducted to make certain the terms of the contract were fulfilled, and the payment is made.

Seller performance evaluation Seller performance evaluation is a written record of the seller's performance on the contract and is prepared by the buyer. It should include information about whether the seller successfully met contract dates, whether the seller fulfilled the requirements of the contract and/or contract statement of work, whether the work was satisfactory, and so on. Seller performance evaluations can be used as a basis for terminating the existing contract if performance is not satisfactory. It can also be used to determine penalty fees in the case of unsatisfactory performance or incentives that are due according to the terms of the contract. They should also indicate whether the vendor should be allowed to bid on future work. Seller performance evaluations can also be included as part of the qualified sellers lists.

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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