Using the Theory of Contracts to design and manage donor-funded projects
Over the years, most International Governmental Organisations (IGOs) have been able to raise substantial amounts of money through donations and gifts, and allocate this money in various locations around the world to empower and improve the lives of many. Today, it has never been more important for IGOs to employ highly skilled professionals who can assist in the management of complicated projects and programmes being implemented around the world. The need for well-equipped, career-minded human resources with the skills to design, develop and manage donor-funded humanitarian projects, as well as the vital surplus funds at the end of financial years, which generate skills that enable them to progress in their careers, is paramount.
The six (6) phases of the humanitarian project cycle
Stage 1: Programming
This is the first stage of the HPLC, and includes an analysis of the process of setting broader organisational and sector policy objectives at the global level. The relationship between these overarching objectives and those of the Sustainable Development Goals (SDGs) is considered and demonstrated.
Stage 2: Identification
This is the second stage and involves the design of the various techniques used to identify the core areas that fall under the purview and implementation of the Humanitarian Project Life Cycle, from the prioritised list of overall objectives.
Stage 3: Formulation
This is the third phase of the HPLC and must focus on the design and implementation strategies as well as logic testing and feasibility analysis, i.e. how best to infuse the implementation taking into account the enterprise environmental factors and the private donor's objective and expectations.
Stage 4: Financing
This is the fourth stage and defines the contractual obligations between the funding agency i.e. the contracting authority and the implementing agency or party i.e. the contractor, supplier, consultant (individual and technical services based). It is at this stage that the theory of contracts or contracts management plays its most important and effective role. Without the input of a Contracts Portfolio Specialist, the chances of having a non-deliverable project implemented without the time, cost and quality parameters are examined.
Stage 5: Implementation
This is the fifth stage and involves structuring the stages of project implementation.
Stage 6: Evaluation
This is the final stage and is designed to continually evaluate the initial five (5) phases as a Total Quality Management (TQM) tool for continuous improvement and also to quickly identify and well document both in and out learned lessons. This process also seeks to justify and complete the cycle for the reasons why donors contributed to the implementation of the applicable HPLCs.
Theory of Contracts
The theory of contracts plays a crucial role in keeping HPLC and other project costs down in general. It ensures compliance with legal requirements, i.e. sovereign. Enterprise environmental factors and designs are the ideal contractual vehicles to mitigate, avoid and, in the worst case, transfer risks. The importance of engaging a highly experienced contract portfolio specialist for humanitarian projects cannot be underestimated. The wrong or poorly drafted contract clause can easily cost the donor agency huge sums of money and inconvenience that could have been easily avoided. By implementing good contract management practices, project managers can anticipate and manage potential delays, limit disputes and conflict management, and greatly increase the potential for successful project implementation. It is also important to emphasise that there is a clear difference between contract expertise and legal advice.
How does Theory of Contracts ensure project implementation success?
- Confirming the need to engage a third party.
- Confirming the availability of funds.
- Establishing specifications.
- Conducting market research.
- Initial enquiry.
- Designing the type of contract to be used i.e. one-off Standard Contract, Framework Agreement or Dynamic Purchasing System (DPS) etc.
- Drafting of the contract.
- Review and approval of the draft contract.
- Initiate negotiation processes.
- Approval of the contract.
- Signing of the contract by all parties.
- Issue call-offs for framework or DPS agreements (where applicable).
- Contract execution.
- Management of commitments.
- Revisions, amendments and variations.
- Contract review.
- Contract renewal (where applicable).
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