--- title: "Contract administration process" subject: "ICT Project Management" chapter: 13 key: "semester_7/ict_project_management:contract-administration" source: https://www.bctengineer.com/q/semester_7/ict_project_management/contract-administration site: BCT Engineering --- # Contract administration process ICT Project Management · Chapter 13: Project Procurement Management - Asked in: year not given - Answer checked by Claude Opus 5.5 (high effort) on 2026-10-14 - Page: https://www.bctengineer.com/q/semester_7/ict_project_management/contract-administration - Whole chapter: https://www.bctengineer.com/md/semester_7/ict_project_management/chapter-13 ## Question What do you mean by the contract administration process? ## Short answer Contract administration manages procurement relationships during execution. It monitors seller performance, conducts inspections, approves payments and changes, resolves claims, and maintains records to ensure both parties fulfill contractual obligations and protect their rights. ## Answer **Contract administration** (Control Procurements) is the process of managing procurement relationships, monitoring contract performance, making changes and corrections as needed, and closing contracts. Both the buyer and the seller administer the contract to make sure that both parties meet their obligations and that their legal rights are protected. It is performed during execution of the contract and integrates with other project management processes. #### Activities 1. **Monitor seller performance**: compare actual work with contract requirements (quality, schedule, cost). 2. **Inspections and audits**: verify deliverables and the seller's processes. 3. **Performance reporting**: obtain regular reports from the seller. 4. **Payment system**: verify invoices against progress and approve payments as per the terms. 5. **Contract change control**: manage changes in writing through a formal procedure, with the approval of both parties. 6. **Claims administration**: handle disputed changes and claims through negotiation, alternative dispute resolution (mediation, arbitration) or litigation. 7. **Records management**: keep all correspondence, contract changes and approvals. 8. **Manage relationships** and communication with sellers. 9. **Monitor risks** and ensure compliance with legal terms. 10. **Integrate** with other processes, e.g. scope, schedule and cost control. ```text Contract -> Monitor performance -> Inspect -> Approve payments / changes -> Resolve claims -> Prepare for closure ``` #### Tools Contract change control system, procurement performance reviews, inspections and audits, performance reporting, payment systems, claims administration, records management system. #### Outputs Procurement documentation, change requests, work performance information, updates to plan and OPA. #### Importance Ensures that sellers deliver the right quality on time, controls cost, reduces disputes and protects the interests of the organisation. **Example:** For a software vendor on a milestone-based contract, the manager reviews each deliverable, pays only on acceptance, processes a signed change order for an added module and records everything. ## Check yourself The answer's key points as multiple-choice questions, with the correct option and why. 1. Contract administration corresponds to which PMBOK process? A. Plan Procurement Management B. Conduct Procurements C. Control Procurements D. Close Procurements Answer: C. Contract administration is Control Procurements: managing relationships, monitoring performance and making changes. (Key point: Process name) 2. How should contract changes be managed? A. Verbally and informally B. In writing through a formal procedure with approval of both parties C. By the seller alone D. Only after contract closure Answer: B. Contract change control manages changes in writing with both parties' approval. (Key point: Change control) 3. How are disputed changes and claims handled? A. Ignored B. Negotiation, mediation, arbitration or litigation (alternative dispute resolution) C. By deleting the contract D. By advertising again Answer: B. Claims administration resolves disputes through negotiation, mediation, arbitration or litigation. (Key point: Claims) 4. On what basis are payments approved in contract administration? A. Invoices verified against progress and contract terms B. Seller's request alone C. Date only D. Advance for all work Answer: A. The payment system verifies invoices against progress and terms before approving payment. (Key point: Payment basis) ## Related in ICT Project Management - [Contract closure process](https://www.bctengineer.com/question.md?key=semester_7%2Fict_project_management%3Acontract-closure-process) — ICT Project Management, chapter 13 - [Contract and contract negotiation](https://www.bctengineer.com/question.md?key=semester_7%2Fict_project_management%3Acontract-negotiation) — ICT Project Management, chapter 13 - [Contract procurement performance review](https://www.bctengineer.com/question.md?key=semester_7%2Fict_project_management%3Aprocurement-performance-review) — ICT Project Management, chapter 13 - [Organizational process assets](https://www.bctengineer.com/question.md?key=semester_7%2Fict_project_management%3Aorganizational-process-assets) — ICT Project Management, chapter 7 - [Close project process](https://www.bctengineer.com/question.md?key=semester_7%2Fict_project_management%3Aclose-project-process) — ICT Project Management, chapter 7 ## Related in other subjects - [Contract, tendering process, agreement](https://www.bctengineer.com/question.md?key=semester_8%2Fengineering_professional_practice%3Acontract-tendering-agreement-elements) — Engineering Professional Practice, chapter 4 - [Depth of well and sinking process](https://www.bctengineer.com/question.md?key=semester_5%2Ffoundation_engineering%3Awell-depth-sinking) — Foundation Engineering, chapter 9, asked 3× - [Case study: critical factors in process control](https://www.bctengineer.com/question.md?key=semester_5%2Finstrumentation_ii%3Acs-critical-factors) — Instrumentation II, chapter 10, asked 2× - [Random process; white noise PSDF and autocorrelation](https://www.bctengineer.com/question.md?key=semester_6%2Fcommunication_systems%3Arandom-process-white-noise) — Communication Systems, chapter 9, asked 2×