Effective Contract Management Research Articles

Effect of Contract Management Phases on Supply Chain Performance among Manufacturing Firms in Nairobi County, Kenya

Purpose: Contract management entails process which ensures parties to the contract undertake the contracts as per the objectives and obligations in the contract. Contract management also involves execution of roles and responsibilities through creation of conducive working relationship to all parties in the agreement. The objective of the study was to establish effect of contract management phases on supply chain performance among manufacturing firms in Nairobi County.
 Methodology: The population of the study was manufacturing companies which are based in Nairobi, Kenya. Nairobi has 640 manufacturing firms. The sample size of this study consisted of 246 supply chain managers in manufacturing firms in the Nairobi, obtained through stratified sampling and randomly selected. Self-administered questionnaire were used to collect data from the respondents. The quantitative data was coded and grouped into to various categories, percentages, frequencies, means were derived and presentation done through tables for compiling the study.
 Findings: The study found that pre-contract phase, solicitation, contract execution phase, post award phase influenced supply chain performance as per correlation analysis. The findings indicted buyer specifications are emphasized at pre-contract stage, the contract is signed at execution stage and deliverable during post ward phase and all the stages are crucial for supply chain performance at manufacturing firms. The study concludes that manufacturing firms depend highly on the clear contract singing and fulfillment of the contractual obligations by all parties across the phases. The study also concludes that the success of the firm will depend on efficiency in supply chain therefore; the management should ensure that there are no lapses in the procurement process.
 Unique Contribution to Theory, Practice and Policy: The study recommends that there is need for manufacturing firms in Kenya to invest in constant training of their employees on effective contract management across all the phases to enhance their performance. The study also recommends that manufacturing firms in Kenya should put in place appropriate measures that ensure that potential risks regarding contract management phases, detected in advance, and mitigated to enhance operational performance.

Supplier goal commitment in performance-based contracts: the lens of goal-setting theory

PurposeThis study aims to empirically test the effects of key characteristics of performance-based contracting (PBC) (i.e. reward/payment scheme, increased supplier autonomy and transfer of responsibilities) on supplier goal commitment.Design/methodology/approachThis study developed a conceptual model applying goal-setting theory (GST), expectancy theory (ET) and job characteristics theory (JCT). Survey data were collected and analyzed using structural equation modeling (SEM) to establish a validated measurement instrument for testing the hypotheses.FindingsThe findings revealed that PBC positively affects supplier goal commitment due to its unique characteristics, which translates into improved supplier performance. Furthermore, this study validated the mediating role of goal alignment and felt accountability operating between PBC characteristics and supplier goal commitment.Research limitations/implicationsThis study explored the buyer–supplier relationship from the supplier's standpoint. Using a more inclusive data set, future research may involve a dyadic analysis and focus on the effects of the following factors on the supplier goal commitment: relational aspects (e.g. trust and collaboration), the risk transfer from the buyer to the supplier, different incentive schemes and successful PBC implementation factors.Practical implicationsThis study presents new, validated insights for contract selection, design and management. It underlines the importance of choosing the proper contract, having the appropriate contract design based on the desired outcomes and effective contract management by exhibiting the psychological/behavioral effect of fundamental PBC characteristics.Originality/valuePBC represents an active research stream, but its psychological/behavioral implications are understudied. Therefore, this research puts forth a conceptual framework with multiple testable hypotheses illustrating the relationship between PBC and supplier goal commitment.

Towards a More Sustainable Multimodal Transport Through Effective Contract Management

Multimodal transport, including aerial segments, is considered to be highly efficient. Reducing the inefficient use of transport capacity makes transport less environmentally problematic and more sustainable. Such multimodal transport, however, requires a combination of different transport methods and different operations, ie for transhipment. Companies started to use container technology decades ago and new efficient models have been developed year after year. However, transport law lags behind and often relies on conventions from the 1950s. Transport law is mainly dominated by the international Transport Conventions that apply to transport by a single means of transport, apply mandatorily and entail different legal regimes without identifying their scope. For private parties this results in unpredictable obstacles that they need to deal with in contracts to preserve the sustainable character of multimodal transport and prevent highly unsustainable negotiations and litigation costs.

Structural model of cost overrun factors affecting Pakistani construction projects

Cost overruns are a global challenge to successfully completing construction projects. Cost overrun has a substantial impact resulting in most construction projects failing to be completed. Several factors have contributed significantly to the industry's decline. The factors were discovered in the literature, assessed, and applied to the construction industry in Pakistan. This study scrutinized and identified the relationships between the factors causing cost overruns in the Pakistani construction industry using the Partial Least Squares Structural Equation Modelling (PLS-SEM) approach. The structural model was created and tested with Smart-PLS software using data from a questionnaire survey of 131 construction practitioners. Six constructs were used to categorise the factors. The model identifies 21 critical factors in Pakistani construction projects, with resource management ranking first. Contract management issues can also contribute significantly to project cost overruns. Model assessment results indicate that the developed model has a substantial power of explaining the factors of cost performance while R2 value showed that 45.7% variance is explained by the model. The model developed model will serve as a jumping-off point for academics, researchers, and practitioners in developing a cost-control system. It is suggested that establishing an efficient and effective contract management protocol among stakeholders throughout the design and supervision stages is extremely beneficial for improving project cost performance and significantly reducing time overruns.

Dispute Risk Management in Construction Projects through Effective Contract Management

Disputes are common in construction projects. The consequences of disputes are negative on a project’s successful completion. It requires more time, cost, and effort to find a resolution once a dispute occurs. Disputes also affect a project’s triple constraints time, cost, and scope. Therefore, disputes are a risk for any construction project. According to many studies, most of the causes of project disputes relate to contract and contractual matters. Therefore, the purpose of this study was to emphasize the importance of effective contract management to prevent or minimize potential construction disputes. The objective was to identify the factors that improve the effectiveness of contract management. This study used secondary data resources by using existing publications from 2018 to 2022. It identified five different factor categories that affect the effectiveness of contract management. This research also identified gaps and areas that need future research.

Determinants of Effective Information Sharing in Publicly Funded Infrastructure Projects: A Scoping Review

Using qualitative (content) analysis, we provide a framework highlighting the determinants of effective inter-organization information sharing in developing infrastructure projects. We examined the determinants of effective inter-organization information sharing in publicly funded physical infrastructure projects, focusing mainly on health, education, and transportation projects. The literature search identified 2,330 citations. A review of these abstracts led to the retrieval of 86 full-text articles, of which 40 met the inclusion criteria. Coordination and collaboration were identified as two of the most important inter-organization processes required for the successful development of transportation, health, and education infrastructure projects. These two processes are enabled by several elements of inter-organization information sharing such as human resources and expertise; incentives and rewards; and effective contract management and record-keeping. Our review also demonstrated that for organizations to effectively implement the determinants of inter-organization information sharing, they must first ensure they form effective interpersonal and intra-organization information sharing.

Effect Of Contract Management On The Performance Of Procuring And Disposing Entities In Local Government In Rwanda. A Case Of Kicukiro District.

Regardless of the effort by the governments of developing countries, like Rwanda and development partners like World Bank to improve performance of the procurement function, public procurement is still marred by shoddy works, poor quality goods and services. Failure to implement or delayed implementation of recommended performance standards has resulted in unnecessarily high operation costs, uncoordinated business activities, and failure to attract and retain experienced and skilled personnel in the procurement positions, thus affecting the function’s performance. Therefore, the general objective of this study was to analyze the effect of contract management on the performance of procuring and disposing entities in local government in Rwanda. The study’s specific objectives include: to establish the effect of resources allocation on the performance of procuring and disposing of Kicukiro district; to examine the effect of staff competence on the performance of procuring and disposing of Kicukiro district; and to analyze the effect of control and risk management on the performance of procuring and disposing of Kicukiro district. This study provides decision makers with the valuable information to take intervention programs to achieve greater contract management towards procuring and disposing performance. The study adopted both descriptive and correlative research designs. It adopted a number of data collection instruments including questionnaires, interview and documentary review. Questionnaires were distributed to 103respondents in Kicukiro district though 5 respondents didn’t return their questionnaires; and an interview was held with the management. With the help of SPSS, Spearman test was used to define the nature and magnitude of the relationship between the study variables. Findings revealed that 88.8% of the respondents strongly agreed that all significant materials to be delivered by the client are identified though 24.5% disagreed on the issue of ensuring that the planned resources are procured on time; Secondly, 82.7% strongly agreed that there’s budget for the training of the fthough 34.7% disagreed that the procurement officers follow the available procurement guidelines. Lastly, research results revealed that 96.9% strongly agreed that there are enough resources provided for the control and risk management process though 38.8% disagreed about the proper internal control processes. In addition, a spearman test results 0.004 as a P-Values which explains that there was a strong, positive monotonic correlation between contract management and the performance of the procuring and disposing entities in Kicukiro district. The findings are in line with the poor performance in the district. In order to ensure performance of procuring and disposing, there must be effective contract management. Hence, the researcher concluded that the above must have attributed to lack of proper procurement practices hence poor performance of the district. The top management should rely on the use of e-procurement. Proper internal control processes should be made a culture by the responsible personnel at the district. Officials who delay procurement activities and processes should also be handled individually and be punished.

Factors Affecting Time Overrun in Construction Projects in Bhutan

The construction industry has a significant influence on the economy of a country as it plays a vital role in its development. However, construction projects in countries usually faced time and cost overrun, affecting the economic development and overall performance of the contractors. As infrastructure development is one of the key activities in developing countries, it is very important to analyze the factors contributing to time overrun to enable effective contract management. Time overruns are always associated with cost overrun often putting burden to country’s capital resources. Although time overruns have been recurring issues in construction industry, very little or no researches have been carried out in Bhutan so far. This paper presents a case study of time overrun of construction projects in Bhutan. The study was carried out through an online questionnaire consisting of thirty-one factors which are further sub-divided into seven categories. The one hundred twenty responses were analyzed using relative importance index which shows that inexperienced and financial instability of the contractor, incompetence of human resources, shortage and inefficient equipment, lack of construction materials are significant factors affecting time overrun. Issues related to sub-contracting, unrealistic calculation of the project duration, delay in the mobilization of machines are minor factors of time over-run of the construction projects in Bhutan. Keywords: Time overrun, principle factors, factor analysis, adversity, average index.s DOI: 10.7176/JEP/11-29-01 Publication date: October 31 st 2020

Assessing contract management as a strategic tool for achieving quality of work in Ghanaian construction industry

PurposeThis study aims to investigate the attainment of quality in Government of Ghana’s (GoG) infrastructural projects through effective contract management and especially, relating to qualification, competence and experience of supply chain stakeholders.Design/methodology/approachA survey questionnaire and field observations were used to collect primary data from staff of the education ministry and construction professionals. Documentary analyses of contract documents were also undertaken.FindingsThe results show that executing agencies’ failure to apply appropriate contract management processes was linked to the gap between stakeholders’ knowledge and actual practice. This was confirmed by Spearman’s rho tests of correlation between overall mean ranks given by professionals and non-professionals, which indicated strong agreement between those groups. Factors such as contractors’ engagement of unqualified supervisory staff, lack of proper projects monitoring and evaluation by executing agencies mainly contribute to the poor quality of work.Research limitations/implicationsInvestigations were limited to the Funds and Procurement Management Unit of the Ministry of Education, Metropolitan, Municipal and District Assemblies and local contractors. Nonetheless, the methodology used could be used in future studies to analyse the socio-economic implications on the quality of education infrastructure.Practical implicationsConstruction is booming in Ghana but the capacity to improve the work quality through effective contract management is limited. However, with the effort of stakeholder and statutory bodies’ support in capacity building initiatives, GoG projects could offer some novel solutions to improve quality of work.Social implicationsConstruction industry professionals and students’ knowledge and perception on construction industry and contract management is significantly improved.Originality/valueThis study provides information on respondents’ knowledge on contract management process, which, if not properly understood, can lead to poor quality of work and loss of money.

Development of contract management system for network companies under economy digitalization

In the context of economy digitalization, special attention is paid to process management by company stakeholders, which cannot be considered without regard to the organization’s contract strategy, since a significant part of the business processes are consistently negotiated, concluded and executed, and the management of various groups of contracts is an integral part of the operating business model of network trading companies. This article discusses the main tasks of building an effective contract management system, and provides a typical classification of contracts for network trading companies. In the course of the study, the life cycle of the contract is considered. As a result of the research, the structure of the contract management system for network trading companies is presented.

Knowledge modelling for contract disputes and change control

The construction industry involves many participants with different perspectives and requirements. Contracts can provide significant value, and yet ineffective contract management frequently leads to disputes. In practice, contracts are hardly reviewed, and contract management is limited. This study aims to investigate how firms can improve their internal processes relating to knowledge management (KM) through effective contract management to aid construction practitioners in managing contract disputes and changes. Using a questionnaire survey and a workshop involving experienced industry practitioners and researchers, the findings reveal that project- and individual-level implementation of KM processes is stronger than at the organizational level, and also there are substantial human resources (HR) practices that support contractual KM. Workshop participants believe efficient and effective KM can minimise losses from contract changes and disputes. A construction contract management process framework, a 19-step benchmarking model for contract management and a construction planning checklist for contractors are proposed.

Exploratory factor analysis of skills requirement for PPP contract governance

PurposeThe purpose of this paper is to explore the skills required for effective contract management of public–private partnership (PPP) projects over their contract duration. The growing body of literature indicating the lack of expertise in managing PPP-related projects within the public sector prompted this study.Design/methodology/approachThe study, being an exploratory one, relied on a survey of 207 survey responses from a sample of PPP experts across the globe. The data from the survey are a rich mix of responses from public policy experts, construction professionals, project finance experts, lawyers and academic researchers in PPP.FindingsIt was found through exploratory factor analysis that project management, financial engineering, negotiations, risk management, forecasting, stakeholder management and technical skills were very critical for successful contract management of PPP projects. It was also found that regional characteristics influence skills prioritisation.Research limitations/implicationsThe results of this study can be validated on larger data sets in specific countries and across regions, sectors and variety of PPP projects. Currently, the authors conducted a general survey using convenience sampling.Practical implicationsThe results send a clear signal to practitioners that infrastructure regulation training programs cannot be generalised. Training should be tailored to reflect regional and country-specific characteristics.Originality/valueThe increasing failures and remunicipalisations of privately financed infrastructures is a cause for concern. Little attention has been given to the complicity of PPP regulatory institutions responsible for contract governance of such projects. Studies are increasingly pointing to the absence of critical PPP skills among institutions responsible for managing PPP contracts. This lack of capacity has resulted in poor oversight of private companies providing public services resulting in poor services, and financial recklessness which threaten the sustainability of service provision.

Perspectives of Public and Nonprofit Managers on Communications in Human Services Contracting

Government contracts and grants constitute the largest funding source for the majority of nonprofit organizations. Contracts for complex services, such as those involved in delivering human services, pose substantial challenges for public and nonprofit managers. In this context, concerns have been raised about contract management capacity, including challenges related to proposal and contract development, implementation, and performance reporting, as well as the impact of contract monitoring tools on contractor performance. Relatively few studies have provided a cross-sectoral perspective on the concrete managerial skill sets needed to engage in the interpersonal and technical processes involved in effective contract management. This study reports qualitative findings from a survey of county and nonprofit human service managers regarding approaches to managing challenges that arise in contractual relationships. The results identify the important role played by communication in the relationships between contract managers, illustrate the content of formal and informal exchanges, and identify common perspectives on the characteristics of effective communications, including transparency, a balance of flexibility and consistency, and timeliness. Practice implications for contract management relate to enhancing communication strategies in order to promote stronger contract relationships.

Contracting out: making it work

Performance of contracting as a policy tool has been less than expected. This can mainly be attributed to the fact that for a contract to be effective, it requires meeting many conditions, some of which can be challenging and not always feasible. To work effectively, contracting requires suitable context, an appropriate contract design, and effective contract management such that the parties engage in consummate behavior rather than perfunctory or predatory behavior. This paper identifies the critical conditions required for effective contracting and demonstrates the challenge in meeting them, using the case of National Health Insurance in India. The paper specifically discusses the role that contract management can play in effective contracting, a point that has received little attention, but could be tweaked easily leading to significant impact on contract performance. The paper also provides some suggestions for meeting the challenge of effective contracting.

Do public private partnership projects deliver value for money? An ex post Value for Money (VfM) Test on three road projects in Korea

ABSTRACTThe fiscal efficiency of Public Private Partnership (PPP) projects has been subject to much debate since PPP proliferated in Korea since 1997. The paper aims to determine the fiscal efficiency of three major PPP road projects signed between 1997 and 2005 and currently in operation. We perform an ex post value for money (VfM) test on the three PPP road projects to evaluate their performance in terms of fiscal efficiency. The results show only one of the three attained value for money greater than zero while other two did not. The analysis shows that the key reasons for the failure to deliver VfM are: (1) discount rates fell between the time of contract signing and the time of evaluation and (2) Treasury bond interest rates also dropped during the same period, which together undermined the fiscal efficiency of PPP. This does not mean PPP is not a viable alternative to public procurement. Rather, the findings highlight the importance of effective contract management that can mitigate the risk arising from the changes in project environment during the whole of contract period, such as the changes in Treasury bond interest rates and discount rates.

Bridging the Gap - Contractor and Bureaucrat Conceptions of Contract Management in Outsourcing

Perceptions of bureaucrats and contractors and their contractual relationship underpin contracting success. They are important phenomena but have not been fully explored in the current contracting literature, particularly in a highly politicalized context, namely Hong Kong. Using the principal-agent theory and the transaction cost theory as the theoretical framework, this study examines the perceptions of the key stakeholders, conceptualizes five attributes of effective contract management, and offers recommendations on bridging their perceptions for success of contract administration in Hong Kong. The study helps readers comprehend the dynamics of contract management, and its implications of Hong Kong’s politicalized background.

Assessment of causative factors for project abandonment in Nigerian public tertiary educational institutions

PurposeAbandonment of construction projects is still a burning issue in Nigeria. Beside the poor financing of educational infrastructure, abandonment of construction projects remains a significant contributor to the inadequacy of facilities in Nigerian public tertiary educational institutions. The purpose of this paper is, therefore, to assess the causes of abandoned projects specific to public institutions of tertiary education in Nigeria, with a view to providing empirical data that are generalizable to enhancing successful delivery of teaching and research facilities.Design/methodology/approachPrimary data used for the study were obtained through questionnaires administered to 47 professionals comprising 8 architects, 12 mechanical and electrical engineers, 15 civil/structural engineers, 4 builders and 8 quantity surveyors who were involved in physical development of construction projects in public tertiary educational institutions in Osun State. The data were analyzed using mean analysis, factor analysis and the Kruskal-Wallis (K-W) test.FindingsThe factors most significant to abandonment of tertiary educational institutional projects were delayed payments, fund mismanagement, inadequate budgetary allocation, inadequacy of finance, inflation and bankruptcy of the contractor. Findings also showed that not all factors causing abandonment were significant to tertiary institutional projects. The significant factors clustered under stakeholders’ response capacity, poor financial management, inadequate planning and monitoring, and unexpected occurrences. The K-W test showed significant differences among the categories of tertiary institutions on the ranking of the most significant causes of abandoned projects.Research limitations/implicationsThe study was limited to public tertiary educational institutions in Osun State. Further studies could focus on public health institution projects and private tertiary educational projects to improve the body of knowledge on the subject of causative factors for project abandonment.Practical implicationsThe study provided implications for effective contract management of public tertiary educational institutional projects, which is a significant step to improving the available teaching and research facilities in Nigerian tertiary institutions.Originality/valueThe study provides implications for effective contract management systems of projects for public tertiary educational institutions, thereby improving the available teaching and research facilities.

The Economics of Long‐term Contracts in the Footballers' Labour Market

AbstractPeter Sloane's seminal article in this journal on the objectives of football clubs argued that utility maximising clubs would seek out player talent more aggressively than profit maximising clubs and that this accumulation of player talent by larger teams might need to be checked by redistribution of revenues. We suggest in this article that, in a context of rising revenues and high rewards, the pressures to acquire more and better talent so as to out‐perform other teams on the football pitch leads to a requirement for teams to practise effective contract management. Using a large dataset from the German Bundesliga, we find that players with longer term contracts perform better, ceteris paribus. Hence, selection effects in the award of long‐term contracts dominate moral hazard (shirking) effects in the Bundesliga.

Determinants and constraints to effective procurement contract management in Uganda: a practitioner's perspective

The purpose of this paper is to examine the determinants and constraints of effective contract management and its implications on service delivery since public procurement authority has persistently reported low compliance levels as far as contract management is concerned. Empirical research in this area is relatively sparse. Data was collected using a closed ended questionnaire. Significant predictors of determinants for effective contract management were: clear definition of processes and having in place contract management plans, appropriate methods of capturing key lessons from contract management process, accurate definition of roles and having a knowledgeable contract manager. While the major constraints were found to be: lack of political will to monitor contracts; inadequate capacity and lack of integrity. These findings offer a useful foundation for policy and practical improvement in this important area in Uganda.

Strengthening district health service management and delivery through internal contracting: Lessons from pilot projects in Cambodia

Following a decade of piloting different models of contracting, in mid-2009 the Cambodian Ministry of Health began to test a form of ‘internal contracting’ for health care delivery in selected health districts (including hospitals and health centers) contracted by the provincial health department as Special Operating Agencies (SOAs) and provided with greater management autonomy. This study assesses the internal contracting approach as a means for improving the management of district health services and strengthening service delivery. While the study may contribute to the emerging field now known as performance-based financing, the lessons deal more broadly with the impact of management reform and increased autonomy in contrast to traditional public sector line-management and budgeting. Carried out during 2011, the study was based on: (i) a review of the literature and of operational documents; (ii) primary data from semi-structured key informant interviews with 20 health officials in two provinces involved in four SOA pilot districts; and (iii) routine data from the 2011 SOA performance monitoring report. Five prerequisites were identified for effective contract management and improved service delivery: a clear understanding of roles and responsibilities by the contracting parties; implementation of clear rules and procedures; effective management of performance; effective monitoring of the contract; and adequate and timely provision of resources. Both the level and allocation of incentives and management bottlenecks at various levels continue to impede implementation. We conclude that, in contracted arrangements like these, the clear separation of contracting functions (purchasing, commissioning, monitoring and regulating), management autonomy where responsibilities are genuinely devolved and accepted, and the provision of resources adequate to meet contract demands are necessary conditions for success.