Contract Administration Guidelines, Mozambique PDF

MILLENNIUM CHALLENGE ACCOUNT – MOZAMBIQUE
Contract
Administration
Guidelines
November 2011
Version 2
Contract Administration Guidelines Page 1

Table of Contents
SECTION I: OVERVIEW OF CONTRACT ADMINISTRATION AND

PRINCIPLES OF EFFECTIVE CONTRACT ADMINISTRATION
1.0 Overview of Contract Administration

1.1 Introduction
1.2 Definition, Scope and Objectives
1.3 Contract Administration Functions
2.0 Principles of Effective Contract Administration

2.1 Basis
2.2 Contract Administration Principles
2.3 Contract Administration
SECTION II: CONTRACT ADMINISTRATION PROCEDURES FOR

WORKS
3.0 Contract Administration Procedures For Works

3.1 Contract Administration Process
3.2 Contract Administration System (CAS)
3.3 Contract Commencement Procedures
3.3.1 Purpose
3.3.2 Pre-commencement/ Kick-off Meeting Planning Meeting
3.3.3 Pre-commencement/ Kick-off Meeting
3.3.4 Commencement Checklist
3.4 Tracking Contracts
3.5 Progress Monitoring and Performance Reporting
3.6 Contract Files
3.7 Communication with MCA-M Contractors
3.8 Deliverable Management Process
3.8.1 Managing Contract Deliverables – Works
3.8.1.1 Contract Administration and Supervision
3.8.1.2 The Project Manager
3.8.1.3 Roles and Responsibilities of the Project Manager During Contract
Administration
3.8.1.4 The Engineer
3.8.1.5 Roles and Responsibilities of the Engineer During Contract
Administration
3.8.1.6 The Implementing Entity

SECTION III: CONTRACT ADMINISTRATION PROCEDURES FOR
GOODS
4.0 Contract Administration Procedures For Goods

4.3.1 Purpose
4.6 Contract Files
4.8.1 Managing Contract Deliverables – Goods
4.8.2 Separation of Duties to Eliminate the Risk of Errors
4.8.3 Packing and Shipping Standards
4.8.4 Expediting of Deliveries
4.8.5 Aspects to Consider When Receiving Goods
4.8.6 Preparing the Goods Received Report Based on the Supplier’s Delivery
Documents
4.8.7 Unloading, Unpacking and Assembly of Goods
4.8.8 Inspection
4.8.9 Testing - Test Report (if Applicable)
4.8.10 Action to be Taken at the End of the Warranty Period (if Applicable)
4.8.11 Certification of Acceptance of Goods
4.8.12 Procedure for the Rejection of Non-Conforming Goods
4.8.13 Liquidated Damages
SECTION IV: CONTRACT ADMINISTRATION PROCEDURES FOR

INTELLECTUAL SERVICES
5.0 Contract Administration Procedures for Intellectual Services

5.3.1 Purpose
5.6 Contract Files

5.8.1 Managing Contract Deliverables – Intellectual Services
5.8.2 Introduction
5.8.3 Separation of Duties to Eliminate the Risk of Errors
5.8.4 Contract Administration and Supervision
5.8.5 Aspects to Consider When Receiving Consultant´s Deliverable
5.8.6 Procedure for approval of Reports and Deliverables
5.8.7 Procedure for Rejection of Non-Conforming Reports and Deliverable
SECTION V: CONTRACT MODIFICATION PROCEDURES
6.0 Contract Modification Procedures

6.1 Contract Modification
6.1.1 Rationale
6.1.2 Definition – Contract Modification
6.2 Objectives of Contracts Modification System
6.3 Procedure for Modification of Contracts
6.4 Replacing a Key Staff in Consultant Services Contracts
6.5 Claims Administration System
6.5.1 Basic Principles
6.5.2 General Procedures
6.6 Resolution of Disputes
6.7 Contract Termination
6.7.1 Definition
6.7.2 Reasons for Termination
6.7.3 Procedures for Termination
SECTION VI: CONTRACT CLOSURE AND CONTRACTOR PAST

PERFORMANCE SYSTEM
7.0 Contract Closure And Contractor Performance Reporting

7.1 Contract Closure
7.1.1 Procedure
7.1.2 Contract Closure Documentation
7.1.3 Formal acceptance and closure
7.2 Contractor Past Performance Reporting System (CPPRS)
ANNEXES
Annex 1: Organizational chart for Contract Implementation
Annex 2: Contract Close-Out Form
Annex 3: Contract Administration Form (CAF) Consultancy Services
Annex 4: Contract Administration Form (CAF) Works
Annex 5: Contractor Past Performance Reporting System (CPPRS)

Annex 6: Goods Receipt Form
Annex 7: Contract Administration Information Flow Chart
Annex 8: Contract Modification/Change Order Flow Chart
Annex 9: IPC Process
Annex 10: MCA-M and Implementing Entities Responsibilities Under Contract
Administration - Goods Contract
Annex 11: MCA-M and Implementing Entities Responsibilities Under Contract
Administration - Services Contract

LIST OF TABLES
Table 3.1: Sample Agenda for the Kick-off/Pre-Commencement Meeting – Works

Contract
Table 3.2: Commencement Checklist for Works Contract
Table 3.5: Contract Administration for Works
Table 4.1: Sample Agenda for the Kick-off/Pre-Commencement Meeting – Goods
Contract
Table 4.7: Contract Administration for Goods
Table 5.1: Sample Agenda for the Kick-off/Pre-Commencement Meeting – Intellectual
Services Contract
Table 5.5: Contract Administration for Intellectual Services
Table 6.1: Standard Format for Contract Modification / Change Order Form

LIST OF ACRONYMS & ABBREVIATIONS
BD Board of Directors
CA Contract Administrator(s)
CAF Contract Administration Form
CAS Contract Administration System
CFO Chief Financial Officer
DED Deputy Executive Director
ED Executive Director
ENG Engineer
FA Fiscal Agent
GRN Goods/Works/Services Receipt Note
IE Implementing Entity(s)
IEA Implementing Entity (s) Agreement
MCA-M Millennium Challenge Account-Mozambique
MCC Millennium Challenge Corporation
PA Procurement Agent
ESR Employer Site Representative
PROC M Procurement Manager
PM Project Manager
PC Project Coordinator
LC Legal Counsel

SECTION I:
OVERVIEW OF CONTRACT
ADMINISTRATION
&
PRINCIPLES OF EFFECTIVE
CONTRACT ADMINISTRATION

SECTION I: OVERVIEW OF CONTRACT ADMINISTRATION & PRINCIPLES OF
EFFECTIVE CONTRACT ADMINISTRATION
1.0 OVERVIEW OF CONTRACT ADMINISTRATION

1.1 Introduction
This Contract Administration Guidelines provides information and practical
guidance for use by the Contract Administrators (CAs) and the Millennium
Challenge Account - Mozambique (MCA-M) in general regarding the administration
of contracts with contractors, suppliers of goods, consultants and non-consultant
services providers.
MCA-M shall appoint a CAs for all contracts. For large works contracts, the role of
CAs will be executed by the Supervising Engineer that should indicate the person
who will be MCA-M focal point.
1.2 Definition, Scope and Objectives
Contract administration is the process of ensuring that the contractor, supplier,
consultant, or service provider’s performance meets the key contractual obligations
with the Millennium Challenge Account – Mozambique (MCA-M) on one hand, and
that MCA-M meets its contractual obligations on the other as efficiently and
effectively as possible. It is the administration of all actions after the award of a
contract that must be taken to ensure compliance with the contract; e.g., receiving
timely delivery, acceptance, payment, closing contract, etc. Similar to project
management, each contract is viewed as a mini-project or activity with a unique goal
with a beginning and an end date requiring planning and coordination of relevant
activities as well as documentation throughout the process.
All the effort undertaken through the procurement process – planning, preparation
of procurement documents, submission of bids, evaluation and award – is of little
value unless the intended benefits are actually realized during the contract
implementation period. Effective contract administration therefore aims at:
i) Ensuring that the necessary steps for contract kick-off are all addressed i.e.
securities where applicable, site handing over, advance payments;
ii) ensuring timely delivery of goods, works or services thus ensuring that
parties are aware of key dates in the contract;
iii) that all deliverables are inspected/checked that they are compliant with
terms and conditions of the contract;
iv) when acceptable, necessary acceptance procedures are followed;
v) minimizing risks of overruns by providing timely information and alerts;
vi) ensuring that necessary amendments made to the contract have been
properly administered and received necessary approvals;
vii) smooth administration and resolution of disputes and remedies identified
and implemented as necessary;
viii) ensure that termination, where absolutely necessary, is effected in
accordance with the provisions of the contract;

ix) ensuring that there is smooth contract close-out;
x) ensuring that necessary documentation is effected throughout the duration
of the contract; and
xi) completing contractor performance reports after the completion of the
contract, or as otherwise required.
The key to effective contract administration is to have a clearly defined set of
contract outputs or deliverables as well as defined obligations and rights and timing
of the same. A well-designed contract should encompass clear procedures for
effecting these rights and obligations as well as remedies in case of non-
performance of either party. Contract administration is based on the concept that
the contract is a partnership with rights and obligations that must be met by both
parties to achieve the intended goal. It is not aimed at finding faults but rather
identifying solutions to problems that the parties face in the course of achieving the
objectives.
1.3 Contract Administration Functions

The guiding framework for contract administration system involves the following:
(i) Developing, in an Excel sheet or any other form, a clear statement of the key
contract details in the Contract Administration Form (CAF) detailing key
dates and deliverables.
(ii) Ensure and keep track of supplier and contractor compliance with terms and
conditions of contracts, addressing delays in delivery or performance,
troubleshooting problems, and certifying performance of services,
completion of works and delivery of goods.
(iii) Ensure that there is a proper system in place for review, or testing and
inspection before acceptance of goods, works or service deliverables.
(iv) Ensure that there is a proper system for oversight and review to address the
quality of the performance of services and acceptance of deliverables.
(v) Ensure that payments due to consultants, suppliers and contractors pursuant
to procurement contracts are made within 30 days in accordance with the
Fiscal Accountability Plan (FAP).
(vi) Manage and administer the processes for acceptance and rejection of goods,
works or service deliverables, curing of defects, enforcing warranties and
addressing delays in delivery and performance.
(vii) Ensure the integrity and transparency of the process, with properly filed
back-up documentation to comply with the standard procurement and
contract administration procedures, and in compliance with procurement
and contract audit standards.
(viii) Manage and administer any change orders that modify the original contract.
It is to be noted that change orders have to be approved by the specified
officers for them to take effect.
(ix) Maintain close communication and coordination to ensure a timely and
effective exchange of information, goods requirements and technical
specifications, design drawings, terms of reference, prior no-objections, and
supervision of contracts to assure efficient, transparent and timely
procurement processes.

(x) Manage and support resolution of contract disputes in accordance with the
contractual provisions.
(xi) Manage and administer termination of contracts.
(xii) Ensure smooth contract closure.
The Contract Administration Guidelines have been prepared to address these

critical tasks.

2.0 PRINCIPLES OF EFFECTIVE CONTRACT ADMINISTRATION
2.1 Basis
The main basis of effective contract administration is having a clear description of
rights and obligations. This is based on an accurate and complete description of the
needs in the form of either terms of reference, specifications for works, goods or
services, and accurate quantification of the same on form of deliverables with a clear
timing for effective monitoring. Further, the principle of fairness should be
considered as this is essential for smooth implementation of the contract. A good
contract should also allow for the possibility and mechanism for effecting necessary
and beneficial changes through the approved mechanism. A well-designed contract
should also anticipate unforeseen events and put in place a mechanism for dealing
with such events. It is the task of contract administrator to ensure that all these
activities are implemented accordingly, tracked, documented and any adverse
effects on contract performance mitigated in good time. A contract administration
system has to address the entire life of a contract, from placement to finalization.
It is absolutely critical that the CA reads and understands the contract thoroughly. The
CA should also be familiar with MCA-M rules and procedures related to the contract
implementation.
2.2 Contract Administration Principles

Effective contract administration shall be based on the following main principles
and commitments:
i) Ensuring that the objectives of the Millennium Challenge Compact are achieved
by taking the appropriate and timely action;
ii) Ensuring that contracts are based on clear and accurate description of
deliverables, clear rights and obligations of all parties involved in the contract
execution;
iii) Monitor performance, collect information and identify steps that should be
taken to measure actual contract achievement;
iv) Proactive administration of contracts which should be based on close follow-
up of implementation of the contracts and anticipating problems and
responses before they impact on the contract performance;
v) Successful contract administration based on open and effective communication
between all parties using appropriate channels, means and providing feedback
to enhance contract performance. These could be in the form of progress
meetings, follow-up emails, calls, etc.;
vi) Identifying potential contractual risks such as not meeting the deadlines,
receipt of less than acceptable quality deliverables and alerting relevant
officers; and
vii) Implementing a system of monitoring and evaluating the performance of
contractors, consultants, suppliers and other service providers based on the
MCC Contractor Past Performance Reporting requirements.

2.3 Contract Administration
MCA-M, with the assistance of the PA, shall develop and adopt a Contract
Administration Form (CAF) that will register all contracts main events, and
therefore enable a close follow up of the status of the contract by the CA.
Before a contract is signed, the PA and the CA enters the expected details of the
contract deliverables into the respective CAF. Once the contract is signed, the PA
adds the actual date(s) for contract signature and effectiveness (in consultation with
PM and/or PROC M) and, if necessary, edits the forecast dates for each deliverable
based on the provisions of the Contract. As the contract activity begins and
continues the CA updates the CAF for each event that occurs. The PM, PROC M and
the PA follow the evolution of the contract. If a contract event becomes overdue, or
other problems occur, the PM and PROC M decide what action to take in liaison with
the PA.
Reports from the CAS are produced by the PM, and the PA, if required, will provide
assistance in developing the report. These reports allow a close follow-up of the
status of all contracts by Contract Administrators and MCA-M Management.
The matrix below describes the different actors in the contract administration
system and their main roles. Annex 1 provides the organizational chart for project
implementation.
Acronyms Full Identification Contract Administration Main Role
ED Executive Director Gives the final authorization for

contract interim reports, final reports,
payments, variation orders, and
addenda.
DED Deputy Executive Performs all the duties assigned by and

Director on behalf of ED
PM Project Manager Monitor performance of contractors,

providers and consultants, authorizes
contract interim reports, final reports,
payments, variation orders,
addendums, claims and manages files
and records.
Water Supply & The PM role for the specific Project.

Sanitation Project
Roads Project The PM role for the specific Project.

Land Tenure Services The PM role for the specific Project.

Project
Farmer Income Support The PM role for the specific Project.

Project
PC Project Coordinators The designated person for a particular

project, for example: PC for a specific
road project. Responsible for
supervision of the works and services
of the project assigned to him/her.
Revision of contract interim reports,
final reports, payments, variation
orders, addendums and records of the
specific project assigned. This PC is
assigned amongst the members of the
IE DT.
CA Contract Administrator CA is responsible for assuring that all

contractual conditions for the goods,
works and services contracts signed
by MCA-M as set forth in the Compact
and all related documents are
followed. Keeps track of approvals,
signatures, guarantees, insurance and
all legal documents of the contracts
implementation.
PROC M Procurement Manager Reviews and approves all contracts

and contract modifications within the
limit of the PROC M mandate.
Responsible for initiating Past
Performance Reporting and Close Out
Form.
ESR Employer Site Assist the PM and PC in their duties.

Representative Takes up the role of Employer Site
Representative.
CFO Chief Financial Officer Receives reviews and validates the

information received regarding
invoices, payments, penalties, bonus,
assuring compliance with the contract
terms and MCC guidelines.

LC Legal Counsel Provides legal advice, validates and

approves information according to
contract legal terms, MCC regulations
and GoM regulations when applicable.
MCC Millennium Challenge Monitors and approves actions of

Corporation contract management, deliverables,
addenda, variation orders, changing of
key personnel and others according to
the contract and MCC Guidelines.
BD Board of Directors Approves actions of contract

management according to the contract
and MCC Guidelines.
IE Implementing Entity Monitors and coordinates the activities

related with the works, services and
goods contracts according to the
related project and reports to MCA-M
PM
PA Procurement Agent Prepares the CAF, keeps track of

contracts performance in coordination
with PM and PROC M, and advice
during the execution of the contract.
FA Fiscal Agent Receives reviews and certifies all the

administrative documents and
payments as per the FAP and MCC
Guidelines.
For each critical project, a similar table identifying all the individuals and their role might
be completed.

SECTION II:
Contract Administration
Procedures for Works

SECTION II: CONTRACT ADMINISTRATION PROCEDURES FOR WORKS
3.0 CONTRACT ADMINISTRATION PROCEDURES FOR WORKS

The following section provides guidance on general contract administration matters
and those that relate to specific issues in a chronological order of key stages in a
typical contract. The different tools are intended to enable timely tracking of
contractual events and provide feedback on poor performance. This will enable
MCA-M to take appropriate and timely action when necessary.
The Contract Administration function consists of eight (8) major areas which
commence immediately after contract award:
1. Contract Commencement
2. Tracking Contracts
3. Following and Checking Deliverables
4. Contract Modification procedures
5. Dispute Management
6. Closing a Contract
7. Contractor Past Performance Reporting
8. Archiving Contract Records
These are discussed in detail in the following sections.
Following contract signature, the Engineer is primarily responsible for

administering the contract. The PM will provide contract administration oversight.
These Guidelines outline the responsibilities of the Contract Administration
activities.
The objective of the Contract Administration System (CAS) is to ensure and keep
track of contractor compliance with terms and conditions of contracts, addressing
delays in delivery or performance, troubleshooting problems, and certifying
performance of completion of works. This will be addressed by the use of the
Contract Administration Forms (CAF) which will be first prepared by the PA and
later updated by the designated CAs. The Contract Administration Form (CAF) shall
provide the current status of performance of the respective contract. Essentially, the
CAF is a checklist and a tool against which all essential features of the contract are
tracked. The CAF shall be as presented in the format in Annex 3. There is a separate
CAF for Consulting Services and Works.
The CAF is prepared by the PA immediately a contract has been signed and passed
on to the designated CA. The CAF is used by the CA to track contract performance.
The PA, PROC M and LC will remain available for any advice in contract

administration as requested by the CA. In any case, it is the primary obligation of
the Engineer to track performance and act in regard to a contract under his/her
directorate.
3.3 Contract Commencement Procedure
3.3.1 Purpose: To outline the process for commencement of contracts and conducting
post award kick-off meetings; to provide guidelines for conducting performance
meetings with contractors after the award of a contract to ensure that there is a
mutual understanding of the terms, conditions, and requirements among all parties
who are responsible for the management and performance of the contract.
3.3.2 Planning Meeting for the Kick-off Meeting

Once an award has been made (especially for large Contracts as determined by the
PM), an internal MCA-M meeting should be held involving all key stakeholders.
These shall include the relevant Project Staff, Procurement Staff, Finance and
Administration staff, Implementing Entity, Fiscal and Procurement Agents and the
Supervising Consultant. The meeting, chaired by the relevant Project Manager shall
deliberate on issues that will be covered in the kick-off meeting to ensure that there
is a common understanding of the issues and also to ensure that all the information
and documentation necessary for the commencement of the contract is in place.
Sufficient time should be allowed between the Contract kick-off planning meeting
and the actual kick-off meeting to ensure MCA-M is well prepared to address all
issues that may come up in the meeting.
3.3.3 Kick-off Meeting
Once an award has been made, a meeting is necessary with selected contractor, to
make preparations for the start of the contract. Such a kick-off meeting will
normally be attended by the respective Project Manager (PM) or his representative,
who shall also chair the meeting, contractor (or representative). The meeting should
also be attended by the PA in view of their role with regard to contract
administration. The main objective of the meeting is to effect introductions of key
staff from both sides as well as exchanging information about and agreeing on
principal initial matters concerning each party. Items to be covered in the kick-off
meeting include:
(i) Confirmation of addresses, telephone numbers and lines of communications;
(ii) Clarifying roles and powers (especially where MCA-M will be represented by
an agent such a supervising consultant), if any;
(iii) Arrangement for provision of sets of contract documents to the contractor, if
necessary;
(iv) Confirming proposed staffing and organizational arrangements;
(v) Arrangements for mobilization (staff, plant, etc) and progress reviews made
by the contractor, consultant, supplier or non-consultant service provider;
(vi) Presentation of proposed approach and methodology, and method
statement;
(vii) Agree on the programme of implementation, where applicable;
(viii) Confirm the procedures for provision and access to information, where this is
applicable.
A sample agenda for the kick-off meeting is included in Table 3.1.

Table 3.1: Sample Agenda for the Kick-off Meeting – Works Contract
Agenda for Kick-off Meeting
Date:……………………….................................................. Location…………………………………………….
Item 1: Introduction of MCA-M and IE Staff;

Item 2: Adoption of the Agenda
Item 3: Introduction of the Professional Team/Key Personnel including field staff;
Item 4: Introduction of Contractors Management and Site Team (where applicable) and site handover;
Item 5: MCC Program Particularities with impact on the Contract;
Item 6: Inspection and formal handover of contract documents;
Item 7: Presentation of the Master Programme and Other Programming Documents; (including construction
schedule);
Item 8: Information Release schedule and responsibilities;
Item 9: Environmental, Health and Safety Arrangements, where applicable;
Item 10: Permits and Other Statutory Compliance Needs;
Item 11: Sub-contractor arrangements;
Item 12: Dates for Progress Meetings and Reports;
Item 13: Next Steps; and
Item 14: Any Other Business.
3.3.4 Commencement Checklist
For major infrastructure projects, it is proposed to have a commencement checklist

to ensure that all preparatory aspects of the project commencement have been
taken care of. Table 3.2 presents a proposed commencement checklist that should
be used by the PM with necessary adjustments.

Table 3.2: Commencement Checklist – Works Contract
Project Title: Contractor Name:

Project Manager: Date:
Project Coordinator In-Charge: Supervising Engineer :
Contract and Approvals
Received copy of the signed contract with all annexes and other working documents (specify)
Distributed copies of the contract and communicated key contract information to the internal project team including IEs
All approved working documents or needed documents for Contractors are available for issue to the contractor (if applicable)
Ensured that all necessary approvals to proceed have been obtained – MCC, and MCA-M as necessary
Project Schedule and Budget
Confirmed project schedule and reporting requirements
Identified any significant constraints in terms of schedule, budget, or information needs
Confirmed that the non-national firms have local work permit (when applicable)
Team Member Roles and Contacts
Re-confirmed availability of key persons, and formal introductions of key members
Obtained contact details of key persons – e-mails, telephone numbers, physical address/locations, fax details
Defined points of coordination, communication guidelines, and decision pathways (communication plan)
Agreed on communication methods – as per contract requirements (hard and softcopy requirements)
Confirmed software compatibility
Scope of Work
Confirmed the scope of work as per contract.
Identified the project deliverables, both interim and final, and established milestones
Made work assignments to internal team members including IE staff
Reached consensus among team members on the scope and associated budget and schedule management roles

Project Schedule
Agreed on the project calendar
Confirmed key milestones and reinforced the importance of keeping intermediate and final deadlines
Discussed the interdependencies of certain tasks and identified critical path tasks where necessary.
Project Reviews
Communicated to the team the critical metrics and targets for tracking project performance
Environmental and Social Requirements
Received Contractor Environmental Protection Plan (including anti-trafficking strategy)
Contractor Environmental Protection Plan approved
Received Contractor H&S Plan (compatible with Compact wide H&S guidelines)
Contractor H&S Plan approved
Received Contractor HIV/AIDS Awareness Plan
Contractor HIV/AIDS Awareness Plan approved
Received RAP implementation report
RAP implantation report reviewed and submitted to MCC for clearance
Received RAP implementation clearance from MCC
Received written confirmation that contractor has conducted induction training
Quality Assurance / Quality Control
Completed a Quality Control and Quality Assurance Plan
Identified reviewers and asked them to provide input to the draft Project Monitoring Plan
Established key review checkpoints and integrated them into the schedule
Project Administrative Systems
Established project records management and retention procedures
Defined procedures for project filing and drawing maintenance
Change Management
Established the procedures by which project changes will be identified, managed, and tracked (change management plan)
Reviewed change management procedures with the team, as well as relevant contract terms and conditions

Risk Management
Project team collectively identified potential risks associated with the project
Developed action plans to mitigate those potential risks
Claims Avoidance
Project team has established, assessed and agreed on the Claims avoidance plan for the project
Your Expectations As Project Manager

Defined your expectations of the team regarding quality, commitment, cooperation, communications, etc.
Project Team’s Expectations
Encouraged the team to share their expectations regarding communication, cooperation, recognition, etc.
Additional Issues for Discussion
Key Follow-Up Actions

The status of the contract, contract activities, and contractor performance,
including any deficiencies or corrective actions, is monitored by the Engineer.
The contract schedule and management plan as well as the CAF are used to
monitor the contract’s progress on a regular basis. The activities for contract
tracking include the following:
§ Commencement records and follow up;

§ Management of contract maintenance (filing system) and contract status
(process information);
§ Monitoring of compliance with work plans and deadlines, any deficiencies,
concerns or issues with the work plan or its associated deliverable should
be reported early for a prompt resolution;
§ Deliverable management, acceptance or rejection of a deliverable;
§ Contract histories (contract payments, penalties, etc);
§ Monitoring of the warranties, insurances, and bonds;
§ Recording of contract modifications and variations;
§ Management and support resolution of contract disputes or contract
termination; and
§ Contract close out.
Performance reporting management relies on information about how effectively

the contractor is achieving the contractual objectives. Notifications and warnings
of non-performance have to be issued in accordance with the contract. Such
correspondence may need to be handled in specific ways in order to comply with
the specific contract. The notifications and warnings shall be drafted by Project
Management Consultant and the IE in consultation with the PM, PROC M before
they are signed by the MCA-M ED. In specific cases, such as works contracts
under FIDIC, delivery of such notices have to follow very specific procedures.
The Engineers have the obligation to report on progress of projects which they
are managing on a periodic basis. The Project Management Consultant in
coordination with the IE, need to provide the monthly progress report to help PM
to finalize his report on progress. It is generally advisable that these be prepared
on quarterly basis for project duration of more than six months, otherwise
monthly progress reports are standard. In this case, a comprehensive report shall
cover all contracts which the PMs are managing. The report shall consist of
separate sections for each individual contract. Sample Progress Reporting and
Monitoring Contents are presented in the Table below. Basic contents of progress
report shall be as follows:

Table 3.5: Contract Administration for Works
Progress Monitoring and Performance Report (to be completed by the PM)
a) Project Information
i. Project Name (or Title)
ii. Description of Works
iii. Project Description
iv. Contract Reference No
v. Implementing Entity
vi. Sector
vii. Contractor
viii. Date of Contract Signature
ix. Contract Effective Date
x. Date of Mobilization
xi. Timelines agreed and milestones
xii. Project Deliverables and Key

Dates
xiii. Total Contract Cost and Currency,
Insurances Raised etc.
xiv. Duration of the Contract
xv. Date of Completion
b) Project Progress and Performance Analysis
i. Scope Performance
o Requested changes and

reasons
o Approved changes and

justifications

o Implications on time and cost
o Proposed measures to reduce

adverse impacts
ii. Schedule Performance
o Actual progress vs baseline

plan
o Actual delay and
responsibility for delays

reasons
o Approved changes,
justifications and new milestones
o Projected completion date
o Reasons for delay, if any
o Proposed measures to get

back on track;
o Deliverables and its time;
o List of Work executive and
planned for next month; and
o Physical Progress
iii. Cost Performance
o Actual vs baseline budget;
o Actual cost overrun;
reasons;
justifications;
o Estimate to complete;
o Reasons for additional cost;
o Financial Progress;
o Proposed measured to reduce
costs;
o Warranty / Commissioning
related cost releases etc.; and
o Other matters.
iv. Quality Performance
o Quality assurance measures
o Any deviations from

originally planned quality

o Requested quality changes
and reasons

justifications
o Reasons for deviations, if any
o Recommended measures for

quality improvement
o Other matters
v. Contract Performance and Risk

Assessment
o Comments on contractual
relations
o Contractual claims and/or
variations
o Disputes or potential disputes
o Termination issues, if any
o Other matters
vi. Other Matters
o Project Staff Matters
o Community related issues
o Political issues
o Miscellaneous issues
Summary of Site Visits and Meetings

3.6 Contract Files
The Engineer in coordination with the IE shall be responsible for maintaining a
working file for each contract that shall constitute at a minimum the following
documents:
o copy of the contract and all amendments/variations, reason behind and its
approval;
o copies of invoices and their approvals;
o copy of any guarantees provided by the contractor;
o all backup details of any employer claims for liquidated damages;
o all backup details of all disputes with the contractor;
o copies of all key emails and other communications relating to the contract;
and
o All such documents shall be kept secure by each PM or appointed CA, in
readiness for safety and reference at time determined and agreed at contract
close.
The Legal Council should keep the original of the following documents: contract
and all amendments/variations; and any guarantees provided by the Contractor.
The Fiscal Agent should keep the original of the invoices and the Engineer the
original of the remaining contract documents.
The Engineer and the IE need to provide assistance in providing required
information to PM.
The PM and the Engineer need to ensure that the information in the files enables
a reply to questions that may be raised by the MCC auditor, such as:
§ For any contract amendment or change order, was proper approval
requested and granted? Was there a reasonable justification in accordance
with the Procurement Guidelines?
§ Did the actual contract payments correspond to the amount(s) in the
signed contract? Were any vouchers rejected? (Check with Fiscal Agent)
Were there any advance payments?
§ The securities used (for Bid, Performance, Advances, Insurance, Liability,
etc.), were they in accordance with the Guidelines?
§ Were there any damages or penalties for delays, non-compliance with
functional guarantees, etc? If there were delays and LD (“Liquidated
Damages”) was not applied, then the reason for not applying LD and approval
of the delay.
§ What were the Reasons for Slow Progress of Completion, if applicable?
§ Were there any delays in Payments, Imports, Customs, etc?
§ List of deliverables and completion (date, description, quantity, location of
goods or works)
§ Were there any contractual disputes? How were they resolved?
§ How was the contract file closed out – what was required for this final
step?

The authority to formally communicate with all contractors is the MCA-M ED or

his/her designate. It follows therefore that no formal communication shall be
sent to any MCA-M contractor without the relevant authority. Whenever there is
need to communicate formally to external contractors, then that communication
shall be deemed to have been made by the MCA-M ED.

This is the process for receiving the works generated by the Contractor and
ensuring that contract requirements are met. The Project Management
Consultant and IE of respective project activity need to provide updated
information to PM. The record of performance will be kept by Engineer and copy
of it should be provided to PM and PA for filling purpose. Information on all Asset
deliveries shall also be forwarded to the office of the Chief Financial officer for
registry and inventory management purposes. This process involves several
parties and the activities include:
a) Logging the receipt of the deliverable;
b) Resolving problems related to the date delivery of deliverables;
c) Managing and administering the process for review of deliverables;
d) Overseeing the control of quality and acceptance or rejection of deliverables;
e) Establishing inventories for non-expendable equipment including information
on depreciation and disposal;
f) Establishing maintenance plans, if warranty so requires; and
g) Invoice Processing.
3.8.1 Managing Contract Deliverables
3.8.1.1 Introduction
These Guidelines set forth procedures pertaining to duties and responsibilities of
representatives of MCA-M involved with the administration of contracts for
Works.
The Contract Administration requirements for receiving and accepting Works are
different from Goods or Services. Works constitute a production process using
basic materials and components that may need testing before being built in and
labour that needs supervision to ensure proper workmanship. Whilst receiving
goods or services is of the type “event”, the receiving and accepting Works is a
process that accompanies the contractor from the beginning of his activities.
Close control must be maintained over:

§ Safety at work during construction;
§ Safety/integrity of the Works after construction;
§ Quantity and Quality of the Works;

§ The expenditure of funds, thus achieving savings and assuring that a reliable
audit trail is maintained for contract expenditures resulting from
procurement actions; and
§ Compliance with environmental and social requirements as contained in
relevant Environmental Management Plan (EMP)- where applicable.
This procedure aims to explain who is responsible for ensuring;

(i) how a contract for Works is administered;
(ii) how Work in Progress is inspected, measured and validated;
(iii) how Works are received, inspected, tested, and accepted prior to issuing
the certificates of provisional and final acceptance, the release of the
performance guarantee and the retention guarantee; and
(iv) who is involved, what physical aspects are to be taken into account and
the documentation involved.
The Table 3.5 above is a key document that defines the tasks to be carried out, the
persons responsible for each task and the documents to be completed or
obtained. The list of tasks in the Table has to be followed by all concerned.
3.8.1.2.1 The Project Manager (PM)

The PM is designated by MCA-M to be its representative, responsible for
managing the contract assigned to him/her. In case there is a delegation of power
or the PM is assigned as contract administrator, this will be described in an
official document signed by both the MCA ED and the relevant PM. The PM will
hold a responsible position and will be one of the most knowledgeable employees
on the nature of the Contract. This duty may be performed by an employee
designated in addition to other duties and responsibilities within the
organization. It is expected that the PM is entrusted with appropriate
responsibility and accountability in view of the fact that they have adequately
skilled or trained so that he/she can perform and exercise the responsibility. In
this case, they should act with due care and diligence and observe all accounting
and legal requirements, during the course of the contract; and meets the
obligations of his/her position including monitoring compliance with Work in
Progress, and obtaining remedies when performance delays and/or breaches of
contract occur.
The above is based on the assumption that the Contract has clearly defined
deliverables and performance measures and benchmarks against which the PM
can measure and report. The PM takes care to protect the rights of MCA- M. To do
this, s/he shall ensure that the Contractor fulfills its obligations and accepts its
liabilities under the Contract. There is also a responsibility to ensure that the
Contractor is treated fairly and honestly.
Adherence by both parties to the agreed terms of the Contract will result in:
o good contractor performance;
o value for money;
o timeliness;

o cost effectiveness; and
o environmentally and socially acceptable project.
3.8.1.2.2 Roles and Responsibilities of the PM During Contract

Implementation
The Project Manager:
1. Establishes and maintains, on the premises of MCA-M, an efficient Contract
Administration environment including a proper filing system to ensure
quick retrieval of contract information by Project staff, auditors, PROC M,
PA, CFO, etc.;
2. Maintains regular communication with Project Management staff and with
financial/accounting staff to ensure that contract tracking information is
well coordinated with other planning, budgeting and financial reporting
information;
3. Provides contract information to the financial/accounting staff;
4. Keeps accurate and up-to-date files and records of contract activities to
serve as a basis for audit and Financial Management Reporting;
5. Carries out day-to-day Contract Administration duties related to the
contract between the Contractor and MCA-M and between the Engineer and
MCA-M;
6. Liaises with MCA-M and the Engineer on matters related to the execution of
the Works including the reception process;
7. Supervises, jointly with other sector staff and the Engineer, all
administrative aspects of the implementation of the Works Contract;
8. Reports regularly on the implementation of the Contract; and
9. Obtains payment clearance and follows up the payment process within
MCA-M of Work in Progress, final payment, devolution of the performance
security and retention guarantee and completion of the
Goods/Works/Services Receipt Note.
10. The PM can delegate powers to the IE on technical matters (specs and
drawings) but not on matters which have a financial or procurement impact.
3.8.1.2.3 The Engineer

1. Before the beginning of the activities under the Works contract, MCA-M may
contract expertise to supervise the Contractor’s activities on site. This
function is called “the Engineer” in FIDIC-based contracts or “The Project
Manager” in MCC Small Works Contracts. The Engineer represents MCA-M on
site. He must be duly authorized to monitor and be empowered to instruct the
Contractor on behalf of MCA-M. The Engineer will not be able to act without
the express approval or delegation of authority required for such decision-
making. His identity and authority should be stated in any Works Bidding
documents and must be stated in the Works Contract. For all works contracts
MCA-M will have a Project Manager, a Project Coordinator and the Engineer.
2. The Engineer is the legal person (the Firm) appointed by MCA-M, through a
consultant selection process in accordance with MCC’s procurement
guidelines, to manage and to supervise the execution of the Works and to
propose their taking over and payment of the Works. The Engineer appoints a
natural person (an individual) as its only representative who is familiar with
the project, the design, the Works Contract and the technical aspects of the
Works.
3. The Engineer has the overall responsibility for on-site monitoring,
supervision and approval of works as deliverables on behalf of MCA-M.
4. The Engineer shall act only as provided for in the Works Contract when
dealing with the Contractor otherwise his other obligations are reflected in
his Supervision Contract.
3.8.1.2.4 Roles and Responsibilities of the Engineer during Contract

Implementation
The expert appointed by the Engineer:
1. shall immediately familiarize himself with the terms and conditions of the
contract;
2. ensures that the notice of possession of the site to commence the Works is
issued on a timely basis;
3. ensures that prior to commencement of the Works, a kick-off
meeting/conference with the Contractor is conducted promptly after contract
signing to discuss issues related to the Works, such as quality plans, schedule,
drawings, etc. and to clarify issues of concern raised by the Contractor;
4. carries out “on-site” regular monitoring of the activities undertaken under the
respective contract as is the case with the quality of the physical work in
progress to verify that it corresponds to drawings and technical specifications,
bill of quantities;
5. verifies if Work in Progress complies to planned physical work, etc. as
stipulated in the Contract;
6. conducts regular project on-site inspections on: (i) progress of design and all
submittals and approvals to allow effective mobilization of operations; (ii)
whether planned physical work meets the necessary design requirements
imposed by the enforcing legal authorities; (iii) whether appropriate safety
procedures are followed and (iv) that the necessary insurances are in place;
7. prepares reports on Work in Progress, delivery status, output achieved under
the performance of the Contract;
8. monitors and updates project schedules and project budgets, in consultation
with the IE and the PM, as appropriate;
9. prepares interim payment certificates and submits for IE and MCA-M for
payment;
10. authorize variation orders as is the case with additional works identified
during the construction process as per provisions in the respective Works
Contract;
11. is responsible for changes to specifications and drawings and will seek
approval of MCA PM for any change;
12. liaises, with other sections in MCA-M, e.g. Procurement Agent, Fiscal Agent, as
required;
13. notifies the Contractor of any defects that are found. Such checking and
notification does not affect the Contractor’s responsibilities;
14. as appropriate, attends meetings with the Contractor throughout the period in
which the contract runs, without the right to issue any verbal instructions
directly to any contractors unless there is a clear and obvious risk of
compromise to immediate safety of people or the building. This ensures that

the Contractor receives only authorized written instructions, which may alter
the scope and cost of work;
15. keeps a copy of the contract along with all changes and modifications readily
available and record of all variation, reasons behind it and its approval;
16. maintains a record of inspections, informs the Contractor when unsatisfactory
performance is noted and performs follow up to have deficient work
corrected;
17. makes certain that all emergency situations are attended to and resolved as
quickly as possible;
18. informs the PM when differences of opinion or interpretation of contract
requirements exist between the Engineer and the Contractor which cannot be
mutually resolved at this instance;
19. reports to the IE and PM any problems which has the potential of causing
delay or increasing the cost of the project;
20. obtains drawings, technical bulletins, operational and maintenance manuals,
warranties, keys, other related data prior to making final payment to the
Contractor and makes appropriate distribution of these documents;
21. prepares final deficiency lists;
22. ensures that the contractor rectify deficiencies;
23. verifies completeness of manuals & operating instructions;
24. verifies correctness of guarantees and Final Account;
25. communicates on all contractual matters with the PM and PC and on site
related matters will correspond with the ESR; and
26. exercise all roles and responsibilities attributed to the Contract Administrator
(CA) as described under this CAG.
3.8.1.2.5 The Implementing Entity
The IE is formed by a group of qualified, experienced and reliable staff and

performed under the supervision of the IE. These technical experts are dedicated
to the performance of responsibilities outlined in their contract and the IEA. The
IE will work under the supervision of a coordinator who will coordinate and
supervise the activities of the team under the Defined Project as defined in the
Agreement (IEA). This coordinator will manage the resources under the IEA to
ensure the proper coordination of the team and the project stakeholders to
achieve a successful provision of the services, works and provision of goods
under the contract and to produce reports and documents needed by the IE and
MCA-M PM. In case there is a delegation of power or an IE representative is
assigned as contract administrator, this will be described in an official document
signed by both the MCA ED and the relevant individual; however, the delegation
of power will be limited to technical matters only which have no financial or
procurement repercussions.
1. The IE will work close with the Engineer and the PM and will be responsible
for the direct supervision of the project activities and coordination with all the
stakeholders of every contract.
2. The IE is responsible for the production of project documents, reports and

others requested by the MCA-M PM.

3. Responsible for the production and follow up of the project implementation
plan, works plans and financial plans.
4. Monitor progress on deliverables, works performance and report regularly

(monthly) on all contracts to the IE and to MCA-M. Alert MCA-M PM of budget
and schedule problems under a specific contract.
5. Ensure that payments under every contract accurately reflect the works
contracted and that invoices for payment accurately reflect the cost of goods
supplied.
6. Manage construction change orders within allowed maximum threshold.
7. Work with periodic financial and technical auditors.
8. Review and comment on construction program, plans and methods for

construction works submitted by contractors and supervisors.
9. Manage construction permits, process and verify drawings, review reports

from construction supervisors, inspect project sites and manage all-
construction related files.
10. Implements the powers delegated to them by the PM on technical matters

(specs and drawings) but not on matters which have a financial or
procurement impact.
11. Manage and supervises the Environmental and Social Impacts Issues reporting
directly to the PM.
In any case, the specific provisions of the Works and Supervision Contracts
take precedence over the provisions in these Guidelines.
The guiding framework for works contract administration system involves the
following:
P = Primary Responsibility: means that one needs initiate and lead this activity to
and bears responsibility for this activity.
S= Secondary Responsibility: means that one is involved, has to undertake certain
actions or has a controlling role.
Activities Employer Engineer IEs

Developing, in an Excel sheet or any other form, a clear
statement of the key contract details in the Contract
P S
Administration Form (CAF) detailing key dates and
deliverables.
Ensure and keep track of supplier and contractor compliance
with terms and conditions of contracts, addressing delays in
delivery or performance, troubleshooting problems, and
P
certifying performance of services, completion of works and
delivery of goods. Alert Employer for budget and schedule
problems under a specific contract.
Activities Employer Engineer IEs
Ensure that there is a proper system in place for review, or
testing and inspection before acceptance of goods, works or P
service deliverables.
Ensure that there is a proper system for oversight and review
to address the quality of the performance of services and P S
acceptance of deliverables.
Ensure that payments due to consultants, suppliers and
contractors pursuant to procurement contracts are made
P
within 30 days in accordance with the Fiscal Accountability
Plan (FAP).
Manage and administer the processes for acceptance and
rejection of goods, works or service deliverables, curing of
P
defects, enforcing warranties and addressing delays in
delivery and performance.
Ensure the integrity and transparency of the process, with
properly filed back-up documentation to comply with the
standard procurement and contract administration P
procedures, and in compliance with procurement and
contract audit standards.
Manage and administer any change orders that modify the
original contract. It is to be noted that change orders have to S P S
be approved by the specified officers for them to take effect.
Maintain close communication and coordination to ensure a
timely and effective exchange of information, goods
requirements and technical specifications, design drawings,
P S S
terms of reference, prior no-objections, and supervision of
contracts to assure efficient, transparent and timely
procurement processes.
Manage and support resolution of contract disputes in
S P S
accordance with the contractual provisions.
Manage and administer termination of contracts. S P S
Ensure smooth contract closure. S P S
Manage construction permits, process and verify drawings,
review reports from Contractor, inspect project sites and S P S
manage all-construction related files.
Review reports from Engineer S P
Review and comment on construction program, plans and
S P S
methods for construction works submitted by contractors.
Work with periodic financial and technical auditors. P S S
Manage and supervise the Environmental and Social Impacts
P
Issues and report to the IEs and Employer.

During the construction phase, the role and responsibilities of the Implementing Entities would be as follows:
Activities Implementing Entity Onsite Method of Contract Management by Implementing

Agreements(IEAs) Entities.
Site Handover Employer Site Representatives (ESRs), Project Coordinators (PCs) and
Project Managers (PMs) will participate in the site handover with Engineer
and Contractor.
Schedule and Monitor progress on deliverables of the · ESRs and PCs will assist the Contractor onsite in obtaining
Budget feasibility studies, design and authorizations/clearances from the local authorities, institutions and
construction works and report utilities service providers such as Municipality, ANE, TDM, EDM, CFM,
regularly (monthly) on budget and Water companies, etc. to expedite the works and improve the
schedule performance of all contracts to performance.
MCA - Mozambique.
· ESRs will review and comment construction program, plans and methods
Alert MCA - Mozambique when submitted by the Contractors and submit to the PCs.
schedule or budget problems occur.
· ESRs will verify drawings, inspect project sites and manage all
Review and comment on construction construction related files.
program, plans and methods for
construction works submitted by · ESRs will verify the actual progress of the works against onsite and
contractors and supervisors compare with the Contractor original construction schedule.
Manage construction permits, inspect · ESRs will verify the actual progress of works onsite and compare with the
project sites, manage all construction quantities and unit prices of the BoQs of the Contractor in the original
related files and review reports from budget proposal.
construction supervisors
· ESRs will prepare and submit Weekly Memos (WMs) summarizing the
main activities completed during the week and the activities planned for
the following week. Also, the WPRs will include problems encountered by

the Contractor, Engineers, and ESRs will report to the PCs the actual
status of the construction progress. The PCs will send the WMs to the
PMs.
· Engineer Monthly Progress Reports (MPRs) will be verified against the

actual Contractor construction progress onsite by ESRs and submit a site
memorandum to the PCs.
· Engineer MPRs will be reviewed by ESRs in parallel with MCA -

Mozambique and ESRs will send the comments and recommendations to
the PCs. The PCs will send the comments and recommendations to the
MCA - Mozambique.
· ESRs will alert the actual situation and cause of the problems onsite
pertain to budget and schedule if any with recommendations to the PCs.
Alert MCA - Mozambique about ESRs will alert the actual situation and cause of the problems onsite pertain
contractor performance and Engineers to performance if any with recommendations to the PCs. The PCs will send
supervision the alerts to the PMs.
Quality and Quality Assurance activities: · ESRs will confirm actual contractor construction quality, materials,
Performance Ensure that the quality of the specifications and standards onsite against the proposed in the BoQs.
construction works meets the required · ESRs will alert the actual situation and cause of the problems onsite
standard, and provide quality assurance pertain to quality if any with recommendations to the PCs. The PCs will
on quality control tests performed by send the alerts to the PMs.
the contractors. · ESRs will confirm and witness if possible the testing of materials to be
applied onsite.
· ESRs will verify QA/QC reports submitted by the Engineer and provide
recommendation to PCs.

· ESRs will suggest the Engineer key staff replacement to the PCs if they
are not performing the duties as described in the FIDIC and site
conditions.
· The PCs will submit the recommendations to the MCA for the
replacement of the Engineer Key staff.
Payments Ensure that monthly certificates for · ESRs will regularly witness the measurements of the works by the
Certificates payment from construction contractors Engineer and Contractor in order to provide approval opinion to the
accurately reflect the cost of the works Interim Payment Certificates (IPCs).
completed and that invoices for · IPCs from the Engineer should be verified against the contract BOQ and
payment from goods suppliers physical construction quantities through measurement book.,
accurately reflect the cost of the goods · ESRs and PCs will keep records of the statement of works, IPCs and
supplied invoices.
Work with periodic financial and

technical auditors.
Variation Manage construction change orders · ESRs will provide opinion on new works/activities/quantities and prices
orders within allowed maximum thresholds. proposed by the Contractor through the Engineers and formulate an
approval/rejection assessment and submit to the PCs.
· PCs will prepare and IEs will submit to MCA - Mozambique for the new
unit prices to be proposed along with the new works/activities and
quantities above referred.
· ESRs and PCs will keep records of the contract variation orders.
Claims · ESRs will assess the claims for the extra payment and extension of time
and issue recommendations to the PCs;
· PCs will assess and IEs will submit to the MCA - Mozambique.
Penalties Damage Delay · ESRs will assess the delays on the schedule to determine the delay
damage compensation and will recommend to the PCs.
Violation of Working Law/or the · PCs will assess and IEs will submit to the MCA - Mozambique.

Occupational Health and Safety · ESRs will review and provide comments to the PCs on the maximum
Regulation. amount of delay damages those are determined by the Engineer.
· ESRs will assess that administrative penalties and fines are imposed on
Contractors for health and safety violations of the Workers Compensation
Act and/or the Occupational Health and Safety Regulation.
Contingency The construction contingency is a · ESRs will review and provide an opinion to the PCs for the Engineer
set percentage of the proposal requesting the use of contingency budget for the augmentation
construction contract amount or a scope change of unforeseen works.
budgeted for unforeseen
emergencies or design shortfalls
identified after a construction
project commences.
Site Meetings · Weekly site meetings will be held with Engineer, Contractor and ESRs.
· Monthly Site Meetings will be held with Engineer, Contractor ESRs and
PCs to ensure that the projects are being implemented properly i.e. on
time, within Budget, compliance to the contract drawings, specifications,
and most importantly, to avoid disputes and future problems and issues.
Stop work
Order · ESRs will assist the preparation of Stop work order with the Engineer.
Site · ESRs will cross check the written site instructions issued by the Engineer.
Instructions
CPPRS · ESRs will assist the PMs and PCs to evaluate the Contractors and
Evaluation Engineers and complete the Contractor Past Performance Reporting
Forms System (CPPRS) forms as required.
Environmental, Responsibilities Related to
health and Environmental and Social Impact
safety Issues:
· Provide guidance to Contractors

developing Environmental Impact
Assessments, Environmental
Management Plans (EMPs),
Resettlement Action Plans (RAPs)
and other related studies and
conduct technical reviews of these
deliverables to ensure that all
project activities are carried out in
compliance with applicable MCC
policies and GoM laws and
regulations
· Review project designs, construction
timelines, work plans, and budgets
to ensure that environmental/social
impact issues are adequately
addressed and that adequate time
and resources are allotted for
implementation of these activities
· Participate in the implementation of
RAPs
· Verify that all the Contractors have
obtained all necessary
environmental permits including,
but not limited to permits required
for work camps, quarry operations,
waste disposal sites, borrow pits,

and blasting activities
· Review reports, studies, work plans,
and execution schedules submitted
by the Works and Supervisory
Contractors with regard to
implementation of implementation
of environmental/social mitigation
measures
· Participate in technical reviews and
audits of the implementation of
environmental/social mitigation
activities and incorporate findings
into implementation plans
· Ensure that all Contractors
adequately address worker and
public safety and health concerns
during construction
· Ensure that progress and completion
reports include information on
outcomes of implementing
environmental/social mitigation
measures and current/future
impediments of measureS and
recommendations to overcome
impediments

SECTION III:
PROCEDURES FOR GOODS

SECTION III: CONTRACT ADMINISTRATION PROCEDURES FOR GOODS

contractual events and provide feedback on performance. This will enable MCA-M to
take appropriate and timely action when necessary.
Following contract signature, the designated CAs are primarily responsible for
administering the contract The PM will provide contract administration oversight.
activities.
performance of delivery of goods. This will be addressed by the use of the Contract
Administration Forms (CAF) which will be first prepared by the PA and later
updated by the designated CAs. The Contract Administration Form (CAF) shall
tracked. The CAF shall be as presented in the format in Annex 3.
the CA to track performance and act in regard to a contract under his/her
directorate.


Once an award has been made an internal MCA-M meeting should be held involving
all key stakeholders. These shall include the relevant Project Staff, Procurement
Staff, Finance and Administration staff, Implementing Entity, Fiscal and
Procurement Agents. The meeting, chaired by the relevant Project Manager shall
Once an award has been made, a meeting is necessary with selected supplier, to
meeting include:
necessary;
(v) Arrangements for mobilization (staff, plant, etc) and progress reviews made
by the supplier or non-consultant service provider;
(vi) Presentation of proposed approach and methodology;
(vii) Agree on the program of implementation, where applicable;
applicable.

Table 4.1: Sample Agenda for the Kick-off Meeting – Contract for Goods
Date: ……………………….................................................. Location…………………………………………….

Item 4: Introduction of Suppliers Management and Site Team (where applicable);
Item 7: Presentation of the Master Programme and Other Programming Documents;

The status of the contract, contract activities, and supplier performance, including
any deficiencies or corrective actions, is monitored by the CA. The contract schedule
and management plan as well as the CAF are used to monitor the contract’s progress
on a regular basis. The activities for contract tracking include the following:

concerns or issues with the work plan or its associated deliverable should be
reported early for a prompt resolution;
termination; and

Performance reporting management relies on information about how effectively the

supplier is achieving the contractual objectives. Notifications and warnings of non-
performance have to be issued in accordance with the contract. Such
the specific contract. The notifications and warnings shall be drafted by CA and the
IE in consultation with the PM, PROC M before they are signed by the MCA-M ED.
The CAs have the obligation to report on progress of projects which they are
managing on a periodic basis. It is generally advisable that these be prepared on
quarterly basis for project duration of more than six months, otherwise monthly
progress reports are standard. Sample Progress Reporting and Monitoring Contents
is presented in Table 1 below. Basic contents of progress report shall be as follows:
c) Project Information
vi. Sector
vii. Supplier
x. Date of Commencement

Dates

d) Project Progress and Performance Analysis
vii. Scope Performance

reasons

justifications

adverse impacts
viii. Schedule Performance

plan
o Actual delay and

reasons
o Approved changes,

back on track;
o Physical Progress
ix. Cost Performance
reasons;

justifications;
costs;
o Other matters.
x. Quality Performance


and reasons

justifications

quality improvement
o Other matters
xi. Contract Performance and Risk

Assessment
relations
variations
o Other matters
xii. Other Matters

o Political issues; and
Summary of Site Visits and Meetings
4.5 Contract Files

The CA in coordination with the IE shall be responsible for maintaining a working
file for each contract that shall constitute at a minimum the following documents:
o copy of the contract and all amendments, reason behind and its approval;
o copy of any guarantees provided by the supplier;
o all backup details of any claims for liquidated damages;
o all backup details of all disputes with the supplier; and
o copies of all key emails and other communications relating to the contract.
close.
The Legal Council should keep the original of the following documents: contract and
all amendments/variations; and any guarantees provided by the Supplier. The Fiscal
Agent should keep the original of the invoices and the CA the original of the
remaining contract documents.
The PM and the CA need to ensure that the information in the files enables a reply to
questions that may be raised by the MCC auditor, such as:
§ For any contract amendment, was proper approval requested and granted?
Was there a reasonable justification in accordance with the Procurement
Guidelines?
§ Did the actual contract payments correspond to the amount(s) in the signed
contract? Were any vouchers rejected? (Check with Fiscal Agent) Were there
any advance payments?
§ The securities used (for Bid, Performance, Advances, Insurance, Liability,
etc.), were they in accordance with the Guidelines?
Damages”) was not applied, then the reason for not applying LD and approval of
the delay.
§ List of deliverables and completion (date, description, quantity, location of
goods or works)

§ How was the contract file closed out – what was required for this final step?
4.6 Communication with MCA-M Suppliers
The authority to formally communicate with all suppliers is the MCA-M ED or

his/her designate. It follows therefore that no formal communication shall be sent to
any MCA-M contractor without the relevant authority. Whenever there is need to
communicate formally to external contractors, then that communication shall be
deemed to have been made by the MCA-M ED.

This is the process for receiving the goods by the Supplier and ensuring that
contract requirements are met. The record of performance will be kept by the CA
and copy of it should be provided to PM and PA for filling purpose. Information on
all Asset deliveries shall also be forwarded to the office of the Chief Financial officer
for registry and inventory management purposes. This process involves several
e) Establishing inventories for non-expendable equipment including information on
depreciation and disposal;
4.7.1 Managing Contract Deliverables
This section of the process outlines who is responsible for monitoring that
deliveries of goods are made according to contracted delivery schedules, how the
goods are received, inspected, tested, and accepted prior to payment being made,
who is implicated, what physical aspects are to be taken into account and the
documentation involved. Contracts for non-intellectual services are generally
treated in the same manner as contracts for goods. In case there is a delegation of
power or the PM is assigned as contract administrator, this will be described in an
official document signed by both the MCA ED and the relevant PM.
The relevant PM in consultation with the PROC M shall determine whether or not
the goods and related services received are acceptable and conform to all of the
terms and conditions of the supply Contract. To achieve this, they shall follow the
tasks listed in Table 3.4. This list is a key document that defines the tasks to be
carried out, the persons responsible for each task and the documents to be

completed or obtained. A copy of this list should be provided to the CA of the
contract.
4.7.1.2 Segregation of Duties to Eliminate the Risk of Errors

MCA-M should maintain sufficient separation of duties in order to reduce the risk of
error or fraud in its overall procurement program. The Contract Administration
Process is a critical component of this overarching process. No one (1) person shall
control all key aspects of the entire acceptance process.
4.7.1.3 Packing and Shipping Standards

The Contract shall describe how the goods will be packaged and shipped to their
final destination. Any special packaging and shipping requirements and/or
instructions over and above the standard provisions must be documented in detail
within the Technical Specifications and the Contract administrator’s duty is to
ensure that the standards are applied and compliant with the contract.
4.7.1.4 Expediting of Deliveries

The PM in coordination with the IE is responsible for maintaining communication
with the supplier to ensure agreement on the dates of deliveries and that the
delivery schedule in the Contract is maintained. The PROC M at the specific request
of the PM, may assist in the expediting of supplier deliveries, especially in cases in
which deliveries are very late or non-existent (See “Liquidated Damages”).
Expediting will normally be carried out using e-mail and telephone contact and by
writing formal letters in cases where the supplier is in default, copy of which should
be provided to the CA.
4.7.1.5 Aspects to Consider When Receiving Goods

The respective PM and receiving staff should always consider the following
questions when taking receipt of any delivery of goods based upon the deliverables
stated in the signed contract:
· Is the delivery destined for MCA-M or for a beneficiary at one of its project
sites?
· Are the Goods damaged on arrival?
· Is the piece count correct?
· Is delivery on time, significantly late, incomplete or otherwise
unsatisfactory?
· Do the items comply with the specifications and packaging requirements as
defined by the Contract, General Conditions or Special Conditions?
· Does the delivery require further inspection or testing by another more
specialized person?
· Have all terms listed on the Contract been met?
· Have all operating manuals, guarantee certificates, service books, licenses, or
other documents been received with the Goods and handed over to the
person responsible for the equipment.

4.7.1.6 Preparing the Goods Received Report Based on the Supplier’s Delivery
Documents
Before shipping all or part of the Goods, the supplier must provide to his respective
PM, as designated in the Contract, the delivery documents as required by the
Contract. The PM must verify that each required document has been submitted and
validate its compliance with the provisions in the Contract. These delivery
documents include the Invoice and the Delivery Note (an itemized list of goods to be
delivered / received). The PM makes timely provision for the receipt of each
shipment: She/he:
§ assigns the staff authorized to receive the shipment;
§ establishes, in cooperation with the supplier or his forwarder the exact date,
time and place for the receipt;
§ liaises with supplier to request necessary document for custom clearance;
§ organizes, if necessary, lifting equipment and/or additional manpower for
unloading; and
§ organizes testing (if testing the equipment is foreseen in the Contract).
Based on the Invoice and the Delivery Note, the PM establishes, if necessary, with
the assistance of IE, PROC M, MCA-M’s IT experts, or other competent technical
experts as necessary, the Goods Receipt Note (GRN) for the delivery or shipment in
questions.
If the Contract provides for testing, or a guarantee period, the Goods Receipt Note
(GRN) shall be entitled Provisional Goods Receipt Note. In this case PM confirms
receipt (not acceptance) of the Goods, with copy to the CA.
4.7.1.7 Unloading, Unpacking and Assembly of Goods

In general, the supplier is responsible for delivering the Goods to the final
destination specified in the Contract and for unloading them so that the PM is able to
carry them away and store them. The PM in coordination with the IE is responsible
to ensure that the unloading “environment” is suitable and that appropriate lifting
equipment and manpower is available, if required. At this stage the PM should
ensure that the packages unloaded are correct in quantity and undamaged. If
assembly of the Goods is required, this is normally the responsibility of the supplier,
however PM will prepare the place for assembly and installation of the goods. In
such cases the supplier must unpack the Goods, remove any packaging and
assemble the Goods ready for inspection and testing. Where assembly is not
required it is the responsibility of the PM to receive the Goods in packaged form
ready for storage, and inform the CA of this reception.
4.7.1.8 Inspection
Inspection is the act of examining goods that have been delivered to determine
conformance to what was ordered via the contract.
The authorized receiving staff person appointed by the respective PM at the place of
final destination (MCA-M Headquarters or the project site) verifies non-technical
aspects of the delivery, such as contents, according to the marking on the parcels,
correct quantity, obvious damage). Damaged, “wrong”, unidentifiable or surplus
items shall be rejected immediately. Any discrepancy/objection shall be

documented in the GRN. The responsible person for receiving the Goods shall stamp
and sign the GRN and have it countersigned by the supplier or his forwarder to
acknowledge that the Goods were delivered, not that they were "accepted.” The
authorized person responsible for receiving the Goods shall send the completed
GRN, without delay, to the PM for further action.
The properly stamped and signed GRN is an indispensable document to authorize
payment. Missing or faulty GRN’s with payment invoice will delay payment. Based
on the findings of the GRN the PM, if necessary after consultation with the PROC M,
authorizes payment (if satisfied) or, if not satisfied, contacts the supplier to remedy
a faulty delivery. The CA should be informed.
4.7.1.9 Testing - Test Report (if Applicable)

If appropriate, the Technical Specifications should provide for the type and the
duration of the tests. In some cases, the testing may require specialized skills or
expertise in examining the Goods to determine conformance. The PM appoints the
person who will carry out the testing. Testing can be carried out on the first item
delivered or by random sampling of some or all items delivered. Testing determines
whether the Goods are in substantial accord with the supplier’s and/or the
manufacturer’s technical specifications, meets the minimum specification as
indicated in the Contract and performs at a satisfactory level.
The technician/engineer appointed by MCA-M and/or a responsible person at the
site tests the equipment. For example, MCA-M has purchased a printer. The
Technical Specifications identified a 30-day acceptance testing period, during which
the printer would be required to run error-free from the first day of installation. The
technician/engineer tests the performance of the printer during 30 days. At the end
of the testing period the technician compiles the Test Report (either certifying
error-free functioning or listing deficiencies found with recommendations on
remedy change/repair/service by the supplier) and sends it to the PM. This Report
complements the Provisional GRN and attests whether or not the Goods are in
conformity with the Technical Specifications required in the Contract.
The PM recommends authorization for payment, if satisfied, or, if not satisfied,
contacts the supplier to remedy a faulty delivery based on the findings of the
Provisional GRN and the Test Report.
The CFO authorizes the payment to the supplier and the CA is informed.
4.7.1.10 Action to be Taken at the End of the Warranty Period (if Applicable)
In Goods Contracts with items under warranty, warranty claims are protected either
by retaining the final payment or by a Performance Guarantee.
At a reasonable date before the expiry of the warranty period the users of the Goods
shall report to the PM any deficiencies that may be covered by the warranty. The PM
shall check the reports and shall file all justified warranty claims with the supplier. If
at the end of the warranty period no warranty claim has to be filed, the PM shall
authorize the final payment or return the Performance Guarantee, as appropriate.
If warrantee claims are being made, the PM shall call on the supplier to extend the
validity of his Performance Guarantee. If the PM does not receive such extension

before the expiry of the original Performance Guarantee, he shall, without delay,
draw down on the Guarantee.
Only when all warranty claims are settled shall the PM either authorize Final
Payment or return the Performance Guarantee, with copy to the CA.
4.7.1.11 Certification of Acceptance of Goods

Acceptance is the legal act of documenting that all the Goods have been delivered
and conform to the requirements of the Contract terms and conditions.
For whatever reason, delivery under one contract may entail one or several
shipments. For each shipment there will be the corresponding GRN and, if
applicable, a Test Report. The PM will collect and hold all Reports until all items
have been received and, if applicable, tested to his satisfaction.
If satisfied, the PM will, by means of a covering note on the GRN, certify the
Acceptance (for deliveries without warranty) or the Provisional Acceptance (for
deliveries under warranty). The PM shall send the covering note with the attached
GRN to the CFO including in it the statement “all Goods delivered and accepted;
payment authorized as per payment conditions”. After paying the invoice the CFO
will, based on the GRN, update the inventories.
If a final payment is due at the end of the warranty period, the PM shall issue the
Final GRN after the expiry of the warranty and settlement of all warranty claims. A
copy of the Provisional and the Final GRN shall be distributed within the Project, to
PROC M and to the CA.
4.7.1.12 Procedure for the Rejection of Non-Conforming Goods

The following procedure should be followed if any of the Goods are not in
conformance with the requirements of the Contract:
1. The authorized receiving staff member (who will be authorized by PM /IE before
goods arrival) that is rejecting goods must sufficiently document the reasons for
the rejection in the GRN. She/he shall stamp and sign the GRN, have it
countersigned by the representative of the supplier or his forwarder and shall
immediately report the problem(s) in writing to the PM.
2. The PM shall without delay contact the supplier when goods have been rejected
that are over-shipments, defective or otherwise non-conformant to the Contract.
3. The PM in coordination with the PROC M, is responsible for notifying the
supplier, making arrangements to hold the rejected goods somewhere protected
from damage, and taking care of rejected goods until the supplier can take
possession of the goods and remove them from the site.
4 The PM in coordination with the PROC M and the CA provides a notice of rejection
letter to the supplier describing the defect(s) that renders the delivery as non-
conforming with contractual requirements, what the delivery and inspection
criterion was, and how the delivered product does not conform.
5. MCA-M can accept any quantity of the Goods and reject the rest. Example: The
contract is for 500 cases of bond paper. The receiving staff person accepts 300

cases and rejects 200 cases that were damaged in transit and returns these to
the supplier.
6. If the supplier, within a reasonable time period, does not remove rejected goods,
the MCA-M may ship rejected items back to the supplier at the supplier's
expense as per contract or after agreement with the Supplier.
The PM with copy to the CA will inform the supplier of the return of the goods and
will send an appropriate instruction to the CFO/FA on how any deductions against
the supplier’s account should be made for the storage and return shipping costs.
4.7.1.13 Liquidated Damages

In the event that Liquidated Damages are foreseen in the Contract, when approving
the supplier’s invoice for payment the PM will mark on each invoice “Liquidated
Damages Not Applicable” in all those cases in which the supplier has delivered the
goods in accordance with the contract timescales. The CA should have copy of the
invoices.
On the other hand, if the supplier has exceeded the dates for the delivery of the
Goods, and the delay is such that Liquidated Damages may be applied, the PM in
consultation with CA will recommend to the CFO/FA for applicable damages to be
applied, in accordance with the Contract.
CFO will also inform the supplier of the application of the Liquidated Damages, with
copy to the CA.
a) the letter should state the length of the notice period;
This Final Notice will be deliver to the Supplier strictly in accordance with the
provisions of the contract, if any. .The Notice shall be copied to the MCA-M ED, PM,
PROC M; CFO, PA, the respective CA and IE and to the issuing bank of the
Performance Guarantee;

Table 4.7 Contract Administration for Goods
Documents/Forms
Step Duties Responsible
Input Output
I- Entering Contract details into CAF PA Contract Contract data recorded
II- Monitoring Delivery in accordance to PM/IE Contract data recorded Updated Contract data recorded
Contract Delivery documents
III- Preparing Acceptance Documentation PM/IE Contract specifications Draft version of Acceptance Record
Organizing Acceptance Purchase Order Authorized person designated
IV- Delivering (and installing) materials on site Supplier Purchase Order Materials delivered (and installed, if applicable)
V- Checking of good condition, quantities PM or authorized person Contract specifications Acceptance Record completed
and/or non technical aspects
Purchase Order Delivery Order and Acceptance Record signed
In the event of compliance: Signing of PM by both parties (Supplier/Carrier and On-Site
Delivery Order and Acceptance Record Delivery Order In-Charge Person or authorized by MCA-M); in
the event of noncompliance w/ corrections.
In the event of noncompliance: Returning IE/Beneficiary
materials Detailed Complaint Report
Signing of corrected Delivery Order and of

completed and corrected Acceptance
Record
Writing of Noncompliance Report

VI- Checking of technical compliance/good On-Site In-Charge Technical specifications Compliance/Good Condition Report
condition Person or authorized
by MCA-M
and/or
Technician/ Engineer

Documents/Forms
Step Duties Responsible
Input Output
VII- In the event of partial delivery after the PM/IE Contract All Invoices and Acceptance Records signed
last delivery to MCA-M’s or authorized by person(s) in charge of acceptance - PM
person’s satisfaction Purchase Order
“Full Delivery” Report
Submitting to FA invoices and Acceptance
Records entitling to certified “Good for
Payment” intermediate payments (in
accordance to Contract)
VIII- Payment CFO Invoices Updated inventory
Encoding of goods, if applicable Listings of accepted materials (materials with codes)
IX- Liquidated Damages PM Invoice to be approved Invoice to be approved indicating “Liquidated
Damages not applicable”
Non applicable Advice from PM Invoice to be approved Non-approved Invoice sent to PA
Compute penalties
Applicable PM Non-approved Invoice Notify supplier
Advice from PROC M /PA on Deduction of amount from Supplier Account

Modalities
X- Authorization to Pay Final Invoice PM Final Invoice Final Invoice approved
Contract Termination Letter sent to Supplier

XI- Terminating Contract IE, PM , LC, PROC M, PA Contract Documentation to be Contract Documentation reviewed
reviewed
CPPRS Form to be completed

XII Archiving documents FA and CFO Documents Keep one copy of all documents related to
payment
PM Keep one copy of all Project documents
Keep one copy of all deliverable documents
PA / PROC M
Keep one copy of all procurement related
documents

PART IV:
PROCEDURES
FOR
INTELLECTUAL SERVICES

SECTION IV: CONTRACT ADMINISTRATION PROCEDURES FOR INTELLECTUAL
SERVICES

contractual events and provide feedback on poor performance. This will enable
MCA-M to take appropriate and timely action when necessary.
Following contract signature, the designated CAs are primarily responsible for
administering the contract The PM will provide contract administration oversight.
activities.
performance of delivery of goods. This will be addressed by the use of the Contract
Administration Forms (CAF) which will be first prepared by the PA and later
updated by the designated CAs. The Contract Administration Form (CAF) shall
tracked. The CAF shall be as presented in the format in Annex 3.

the CA to track performance and act in regard to a contract under his/her
directorate.


Once an award has been made an internal MCA-M meeting should be held involving
all key stakeholders. These shall include the relevant Project Staff, Procurement
Staff, Finance and Administration staff, Implementing Entity, Fiscal and
Procurement Agents. The meeting, chaired by the relevant Project Manager shall
Once an award has been made, a meeting is necessary with selected supplier, to
meeting include:
necessary;
(v) Arrangements for mobilization (staff, etc) and progress reviews made by the
supplier or non-consultant service provider;
(vi) Presentation of proposed approach and methodology;
(vii) Agree on the program of implementation, where applicable; and

applicable.
Table 5.1: Sample Agenda for the Kick-off Meeting
Date:……………………….................................................. Location…………………………………………….

Item 4: Introduction of Suppliers Management and Site Team (where applicable);
Item 7: Presentation of the Master Program and Other Programming Documents;

The status of the contract, contract activities, and supplier performance, including
any deficiencies or corrective actions, is monitored by the CA. The contract schedule
and management plan as well as the CAF are used to monitor the contract’s progress
on a regular basis. The activities for contract tracking include the following:

concerns or issues with the work plan or its associated deliverable should be
reported early for a prompt resolution;

termination; and
Performance reporting management relies on information about how effectively the

supplier is achieving the contractual objectives. Notifications and warnings of non-
performance have to be issued in accordance with the contract. Such
the specific contract. The notifications and warnings shall be drafted by CA and the
IE in consultation with the PM, PROC M before they are signed by the MCA-M ED.
The CAs have the obligation to report on progress of projects which they are
managing on a periodic basis. It is generally advisable that these be prepared on
quarterly basis for project duration of more than six months, otherwise monthly
progress reports are standard. Sample Progress Reporting and Monitoring Contents
is presented in Table 1 below. Basic contents of progress report shall be as follows:
e) Project Information
vi. Sector
vii. Consultant :

x. Date of Mobilization

Dates
f) Project Progress and Performance Analysis
xiii. Scope Performance

reasons

justifications

adverse impacts.
xiv. Schedule Performance:

plan
o Actual delay and

reasons
o Approved changes,


back on track;
o Physical Progress
xv. Cost Performance
reasons;
justifications;
costs;
o Other matters.
xvi. Quality Performance


and reasons

justifications

quality improvement
o Other matters

xvii. Contract Performance and Risk
Assessment
relations
variations
o Other matters
xviii. Other Matters
o Political issues
Summary of Meetings
5.5 Contract Files

The CA in coordination with the IE shall be responsible for maintaining a working
file for each contract that shall constitute at a minimum the following documents:
o copy of the contract and all amendments, reason behind and its approval;
o copy of any guarantees provided by the supplier;
o all backup details of any claims for liquidated damages;
o all backup details of all disputes with the supplier; and
o copies of all key emails and other communications relating to the contract.
close.

The Legal Council should keep the original of the following documents: contract and
all amendments/variations; and any guarantees provided by the Consultant. The
Fiscal Agent should keep the original of the invoices and the CA the original of the
remaining contract documents.
The PM and the CA need to ensure that the information in the files enables a reply to
questions that may be raised by the MCC auditor, such as:
§ For any contract amendment, was proper approval requested and granted?
Was there a reasonable justification in accordance with the Procurement
Guidelines?
§ Did the actual contract payments correspond to the amount(s) in the signed
contract? Were any vouchers rejected? (Check with Fiscal Agent) Were there
any advance payments?
§ The securities used (for Advances), were they in accordance with the
Guidelines?
Damages”) was not applied, then the reason for not applying LD and approval of
the delay.
§ List of deliverables and completion (date, description, quantity, location)
§ How was the contract file closed out – what was required for this final step?
5.6 Communication with MCA-M Suppliers
The authority to formally communicate with all suppliers is the MCA-M ED or

his/her designate. It follows therefore that no formal communication shall be sent to
any MCA-M contractor without the relevant authority. Whenever there is need to
communicate formally to external contractors, then that communication shall be
deemed to have been made by the MCA-M ED.

This is the process for receiving the goods by the Supplier and ensuring that
contract requirements are met. The record of performance will be kept by the CA
and copy of it should be provided to PM and PA for filling purpose. Information on
all Asset deliveries shall also be forwarded to the office of the Chief Financial officer
for registry and inventory management purposes. This process involves several

e) Establishing inventories for non-expendable equipment including information on
depreciation and disposal;
5.7.1 Managing Contract Deliverables – Intellectual Services
This procedure aims to explain who is responsible for ensuring how the reports and
deliverables of consulting services are received, reviewed and accepted, who is
implicated, and the documentation involved. In case there is a delegation of power
or the PM is assigned as contract administrator, this will be described in an official
document signed by both the MCA ED and the relevant PM.
The PM in coordination with the IE determines whether or not the consulting
services received are acceptable and conform to all of the terms and conditions of
the contract. To achieve this they follow the tasks listed in Table 3.5 at the end of
this section. Table 3.5 defines the tasks to be carried out, the persons responsible for
each task and the documents to be completed or obtained. The CA should be
informed on the acceptance/rejection of the reports.
For consulting services that are intellectual services the deliverable is typically in
the form of a report on, for example, training activities, promotional action,
monitoring/auditing or professional advice. Deliverables also take the form of
physical products as is the case with software development, for instance: (i)
software with practicable source codes for users; (ii) technical documentation on
the system to be installed; (iii) system user guide for users, and administration
handbook for the IT team; (iv) detailed training plan; (v) design and preparation of
bidding documents.
5.7.1.2 Segregation of Duties to Eliminate the Risk of Errors

MCA-M should maintain sufficient separation of duties in order to reduce the risk of
error or fraud in its procurement program. No one person should control all key
aspects of the entire receipt and validation process.

The PM in coordination with the IE is responsible for maintaining communication
with the Consultant to ensure that the reporting schedule in the contract is
maintained. This follow-up with the Consultant will normally be done using e-mail
and telephone contact with the writing of formal letters in cases where the
Consultant is in default. Formal letters should be signed by MCA-M ED.
The PM assigns one or several experts amongst the IE to be responsible for review
and validation of the quality and timeliness of the reports and deliverables. Upon

completion of the review/validation the responsible experts compile a Review
Report assessing whether or not the quality of the report / the deliverable is
acceptable taking into account the Description of Services. The CA should be
informed on the acceptance/rejection of the reports.
5.7.1.4 Aspects to Consider When Receiving Consultant’s Deliverables

The IE should always consider the following questions when reviewing Consultant’s
reports and deliverables:
- Is the report or deliverable in compliance with the Contract, and the Description of
Services?
- Has the report or deliverable been submitted in time and in accordance with the
work schedule in the Description of Services?
- Is the report or deliverable of good quality in line with the Contract or of
unsatisfactory quality or incomplete?
- Have all the conditions listed in the Contract been met?
5.7.1.5 Procedure for the Approval of Reports and Deliverables

The approval of reports and deliverables is the process of documenting that the
reports and deliverables conform to the contract conditions.
The DT (project technical experts) appointed to perform the review/validation of

the report or deliverable will compile a Review Report including the date when the
report/the deliverable was received, the description of the report or deliverable
received, the extent of the review/validation performed to validate the quality of the
report and an assessment of the compliance with the requirements in the
Description of Services. The DT will send the Review Report to the PM. If the
Review Report confirms that the report or deliverable fully complies with the
requirements of the Description of Services, the Project staffs informs the respective
PM in writing, and sends the invoice to the CFO with the remark “Good for
payment”. The CA should be informed. The Goods/Works/Services Receipt Note
(GRN) shall also be completed as appropriate and submitted in accordance with the
FAP.
5.7.1.6 Procedure for the Rejection of Non-Conforming Reports and

Deliverables
Where the report or deliverable is not in conformity with the expected quality as
required by the Description of Services then the DT performing the review and
validation must record and describe, in the Review Report, the scope and coverage
of the work performed by the Consultants, the contribution of the report to the
objective of the Description of Services and the lack of compliance or any non-
conformity in the quality of the report. The following steps should be followed when
the report or deliverable is not in conformance with the requirements of the
contract:

1. The authorized DTC that is rejecting the report or deliverable must immediately
communicate the problem(s) that led to the rejection to the PM supported by
the (written) Review Report.
2. The PM shall contact the Consultant when rejecting reports or deliverables that
are in non-conformance to the Contract.
3. The PM provides a notice-of-rejection letter to the Consultant describing the
defect(s) that renders the report as non-conforming with contractual
requirements, what the review and validation criterion were, how the
submitted report does not conform and proposes a deadline for correction of
defects and resubmission of the report. If an invoice has been submitted that
will be rejected due to the rejection of the report or deliverable, the PM shall
submit an appropriate GRN in accordance with the FAP.
4. Once the report is resubmitted the review and validation process repeats as
described above. The CA should always be informed though over the process.

Table 5.5 Contract Administration for Intellectual Services
Documents/Forms
Duties In Charge
Input Output
Entering contract details into
I- PA Contract Contract data recorded
CAF
Monitoring Delivery in Contract data recorded
II- accordance to Contract PM/DT Updated delivery data recorded
Reports received
TOR Specifications, Work
Reviewing and validating Plan in TOR, Copy of
III- DT Review Report for report or deliverables
technical compliance
Contract
In the event of noncompliance: Acceptance Report
Writing Acceptance Report
IV- PM Review Report
In the event of noncompliance:
Writing Rejection Letter Rejection Letter
Executing payment including
V- CFO/FA Acceptance Report Payment made
Compliance Check
VII- Paying Final Invoice PM Final Invoice Final Invoice approved
Contract Termination Letter sent to
Consultant
VI- Terminating Contract PM/PROC M/LC Contract Documentation to Contract Documentation reviewed
be reviewed
PM CPPRS Form to be completed
VIII- Archiving contractual PM/DT Documents Keep one copy of all Project documents
documents CFO Keep one copy of all documents related to
payment
PM/DT Keep one copy of all deliverable and
procurement documents
PA/ PROC M Keep one copy of all contractual

documents

SECTION V:
CONTRACT MODIFICATION
PROCEDURES

SECTION V: CONTRACT MODIFICATION PROCEDURES
6.0 Contract Modifications and Change Orders, Variation Orders and

Approval Process
6.1 Contract Modification
6.1.1 Rationale
After a contract has been signed, there may have justifiable reasons to want to
modify, or change, the contract. In general, contract modifications necessarily
require the agreement of all parties to the contract. A contract therefore cannot
be amended or modified unilaterally.
6.1.2 Definition – Contract Modification
A contract modification may introduce or cancel specifications or terms of an

existing contract, while leaving intact its overall purpose and effect.
Modifications are issued usually bilateral through a supplemental agreement.
These are also referred to as contract amendment or modification of a
contract.
Examples of Contract Modification may include:
• A change in the duration of the contract – say in a contract, goods were to be

delivered within 45 days but due to urgency of the need for the goods, a
delivery period of say 30 days is agreed. In this case, the supplier may agree to
deliver at a shorter period without any additional cost.
• Modifications to the description of the material products, goods or service to

be provided it meets the same technical performance requirements. For
example, a PVC pipe that was previously specified may be replaced by a steel
pipe than can perform the same purpose.
• A consultant contract involved ten major deliverables but for some reason,
three are considered no longer necessary and therefore the need to modify
the contract.
• For road works contract, the original scope of work did not include a major
bridge, but the Employer now requires the Contractor to also construct the
bridge. The Contractor and Employer may agree a modification to the
contract.
• The parties may agree to a different payment terms without any other change
in the contract performance, say change in contractor bank details.

• All changes to the contract values or payment schedules shall be made after
verification are with FA on already paid up deliverables.
Even when there is no express provision for contract modification in the contract,
parties can agree to a modification.
6.2 Objectives of Contracts Modification System
A contract modification system defines the process by which the contract term or
condition may be modified, deleted or inserted. In effect, it is a change to the
contract itself. In principle, a change to a term in the contract can be agreed upon
by the parties to the contract. It requires that the contracting authority within
MCA-M has to consent to the change and vice versa. A change to a contract is for
example, when for some reason, MCA-M wishes to expedite completion of a
consultancy assignment earlier than is included in the contract or a term of the
contract has to be deleted, for example when there is a requirement include a
submission of a performance guarantee in the contract, although this considered
unnecessary at the time of the execution of the contract. As a principle, contract
modifications are undesirable and should be avoided as far as possible mainly
by ensuring that the contract terms and conditions are clear, accurate and
complete before entering into the contract. In this regard, clear justification is
necessary before a modification is authorized.
6.3 Procedure for Modification of Contracts
A change to the contract includes the paperwork, with all the supporting and
approval levels necessary for authorizing changes. In any case, the authorization to
the change itself will depend on the size of the contract and the implications to the
contract – financial, schedule, scope and quality. Whenever such situation arises,
extensive consultations will be required involving the relevant IE, PM, PROC M, CA,
CFO, and in some cases MCA-M Management and MCC. The system for modification
of contracts shall be as follows:
i. The request for contract modification can emanate from any section from
within MCA-M and IEs. Variations (change orders) can be initiated by the
Engineer or the Contractor;
ii. The Engineer in coordination with the IE shall compile a complete

submission for Contract Modification/Change Order Authorization
Form attaching supporting documents and justifications. These shall
include justification for the modification, additional cost, time and where
necessary quality implications. This documents will be submitted to the
PM;
iii. The PM, with copy to the CA, shall forward the same to the CFO who shall
confirm that there is sufficient budgetary allowance to cater for the
additional costs, if any. In the case of no cost modification, the submission
to CFO is not necessary;
iv. The CFO shall sign to confirm that there is sufficient budgetary allowance
or otherwise. The CFO shall forward the Contract Modification/Change

Order Authorization Form to the PROC M for onward processing or
reject if no funds are available;
v. The PROC M shall scrutinize the request, in consultation with PA and the
MCA-M Legal Counsel, referring to the terms of the relevant contract a
clear statement of the implications shall be provided;
vi. The PROC M shall either recommend approval or rejection by MCA-M ED,
of the request if within the PROC M s mandate;
vii. If recommended for rejection, the PROC M shall forward the same to the
MCA-M ED and copy to the relevant PM with clear explanations for
reasons for recommendation for rejection;
viii. If recommended for approval, the PROC M shall forward the approval to
the Legal Counsel (LC) for legal clearance and formalizing the contract
modifications request, otherwise the LC shall prepare the necessary
transmittal letters for MCA-M ED’s signature;
ix. When the request is outside the PROC M´s mandate and the request is
plausible, the PROC M shall still sign the Form and forward the same to
MCA-M ED in accordance with relevant procedures;
x. The MCA-M ED may, if required, forward to MCA-M Board of Directors

(BD) or MCC for consideration or approval;
xi. The MCA-M BD or MCC or both shall consider, reject or sanction subject to
approval of MCC;
xii. The Secretary of the Board shall inform the PM and PROC M and the CA
promptly on the outcome of this submission;
xiii. The LC shall then prepare the necessary transmittal letters for MCA-M
ED’s signature;
xiv. In any case, no such change shall be effected to an existing contract unless
the other party agrees to the change; and
xv. The CA should have a copy of the final document signed by the contractual
parties.
Only when it is absolutely necessary would there be any change to the contract
terms. For changes in the conditions of contract based on MCC standard
contracts, waivers have to be sought in accordance with the PPG.
A Standard Format for Contract Modification / Change Order Form (Table 4.1)
has been designed for use in effecting contract modifications.

Table 6.1: Standard Format for Contract Modification / Change Order Form
REPUBLIC OF MOÇAMBIQUE
MILLENIUM CHALLENGE ACCOUNT –

MOZAMBIQUE
Contract Modification/Change Order Authorization Form
Note: This form is to be used when changes in the scope of work, goods or services are required after the award of
contract. After obtaining the required approvals, the original shall be kept in the Contracts File with copies to
the relevant IE, PM, PROC M, CFO, FA and PA.
Contract Title:................................................................................................................................
Contract Modification No: ................................ [insert No. 1, 2, etc]
IMPLEM.
ENTITY: SECTOR: FUNDING:
Contract Number
Original Contract Amount US$/MT............................................... Current Contract Price: US$/MT......................
Contract Dates: Start Date: ....................................................... Completion Due Date: .................................................
Extended Contract Completion

Date:.............................
Name of Consultant/ Contractor/Supplier/Service Provider:..............................................................................................
PROPOSED AMENDMENT AND REASONS FOR THE CHANGE: (attach the proposed amendment):
Additional Cost Estimate: .US$......................................Percentage change on original contract amount:

..............%
Proposed Revised Contract Amount: US$...................................[attach details of the source of cost]
Contract change requested by: [insert name and title of the person requesting change]
Name: ........................................................................................................Title...........................................................................

Signature of the Requesting Person................................................................ Date: .......................................................
Signature of the Project Manager1:…………………………..... Date:…………………………………
Signature of the Chief Financial Officer:2................................. Date:..............................................
AUTHORIZATION BY PROCUREMENT MANAGER

The Proposed Contract Modification / Change Order is (tick):
ÿ a) within the limit of the PROC M mandate and is hereby recommended for
approval.
ÿ b) Within the limit of the PROC M and is hereby NOT recommended for approval
(see reasons attached).
ÿ c) Outside the limit of PROC M mandate and is endorsed for consideration by
………….............… (insert MCA-M ED, BD or MCC)
Signature of Procurement Manager............................................. Date:...............................................
AUTHORIZATION BY MCA-M BOARD OF DIRECTORS3 OR MCC (where necessary)

The Proposed Contract Modification /Change Order is (tick):
ÿ a) within the limit of the MCC/MCA-M BD mandate and has been authorized (attach
supporting documents).
ÿ b) Within the mandate of MCC/MCA-M BD and has NOT been authorized (attached
supporting documents/reasons).
Signature of Procurement Manager:...........................................................................................

Date:........................................................................................................................
(attach relevant copy of decision by MCC/MCA-M BD).
The PROC M shall forward the Original to LC for legal Clearance. Modification Notification
to Contractor/Supplier/Service Provider/Consultant.
Distribution:
Original: Contract File (with copy of transmittal letter to Contractor/Supplier/Service
Provider/Consultant)Copy: MCA-M ED, PM, PROC M, CFO; LC, IE, FA, SE/ PROC M and
PA;
1
Project Coordinator is required to confirm with the CFO that there is budgetary allowance.
2
CFO signs ONLY if there is budgetary allowance and forwards to PM
3
MCA-L BD and MCC approvals in accordance with current PPG.

6.4 Replacing a Key Staff in Consultant Services Contracts
Contracts for consulting services provide for replacement of key staff where
agreed in accordance with the provisions of the contract. MCA-M has to have an
internal procedure for effecting the replacement. The following procedure shall
guide this process:
i. Either the IE, MCA-M or the Consultant may propose a change to Consultant
Key Staff in accordance with the provisions of the Contract. To initiate a
change, the party initiating the change – either the IE, PM or the Consultant
must send a written request with explanation duly justifying the replacement
to the other party, copies of the request should be sent to the PROC M and
CA.
ii. The party receiving the request should review the request and determine if
the proposed changes are warranted. The PM shall scrutinize the submission
and advise the PROC M accordingly in the case where it originated with the
Consultant.
iii. If the requested is considered plausible, the Consultant shall submit new staff
curriculum vitae as provided for in the contract otherwise to the PROC M.
iv. The PROC M with the assistance of PA shall then convene with the PM and
appoint three members among MCA-M and/or IE to constitute an evaluation
panel. The members shall evaluate the CVs and ensure that the new staff
meets or exceeds the minimum requirements of the originally proposed staff
member.
v. Approval of replacement staff shall be made by the authority that made the
initial approval for the award of the Contract, with copy to the CA.
6.5 Claims Administration System
6.5.1 Basic Principles

Claims are contested changes, mostly arising out of disagreement on a
compensation for a change or if a change has even occurred. These claims have to
be documented, monitored and managed throughout the life cycle of the
contract in accordance with the terms and conditions of the contract. If MCA-M or
the contractor, consultant, supplier or non-consultant service providers cannot
agree on a claim, it may have to be handled through the dispute resolution
procedures established in the contract. In some cases, this may lead to arbitration
or even litigation. Success in claims depends largely on the quality and quality of
information kept by the Claimant. Conversely, successful defense of claims is also
dependent on the same on the part of the MCA-M.
It is therefore important that IE, PMs manage the contracts such that at any time,
relevant, information, data and any correspondence are well documented on file
(in hard copy). As such, any correspondence with a contractor, consultant,
supplier or service provider which has contractual implications should be done
within and in reference to the relevant contract. PMs should always be conscious
of the fact that any such documentation can be called upon when claims are
submitted, or in case of a dispute or even during litigation. Claims are more
common in construction contracts. These may include:
i. Scope Change Claims;
ii. Differing Site Conditions Claims;
iii. Construction Delay Claims;
iv. Force Majeure Claims;
v. Acceleration Claims;
vi. Design and Construction Defect Claims; and
vii. Suspension and Termination Claims.
6.5.2 General Procedures

A claim should normally constitute a detailed submission by a contractor with the
following information:
i. The basis for the claim including reference to contract clause(s) which
provides the basis of the claim;
ii. Relevant facts of the claim justification of the claim;
iii. Verifiable cost and other data supporting the claim;
iv. Description of any additional compensation requested and justification;
and
v. Documents supporting the claim.
Once a claim has been received by MCA-M, it has to be scrutinized and an

appropriate decision reached. The procedure for general claims administration
shall be as follows, unless otherwise stated in the respective Conditions of
Contract:
i. Claims shall first be considered by the IE and PM who shall forward

his/her opinion to the PROC M, LC and to the CA for consideration. The
PM shall consider the following in submitting his/her opinion:
a) That the relevant contract provides for submission of claims and that
the submission is in accordance with the procedures stated or implied
in the Contract;
b) The Claimant must demonstrate that he has suffered loss, incurred
additional costs or has been delayed due to occurrence of events
specified or implied in the provisions of Contract;
c) He/she must also demonstrate that the additional costs are sufficiently
linked to the events set out in the Contract;
d) The required compensation must be actual financial and not merely
notional loss. The onus for the establishing grounds, completeness and
providing supporting information rests with the claimant. MCA-M has
no obligation to seek for additional information if that what is provided
in the submission is considered insufficient. The Claimant must be able
to provide evidence that additional costs were actually incurred or real
loss has been incurred and not merely inferred; and
e) The contractor must therefore attach supporting documents and
justifications to the claim.

ii. Unless otherwise provided in the specific contract, such FIDIC contracts for
works, the PROC M in consultation with the PA and CA shall scrutinize the
claim for:
a) Admissibility – that the claim has been submitted in accordance with
the Contract and in reference to a clause in the Contract;
b) Validity – it is genuine (it is not a fabrication) in that in implementing
the contract, the consultant, supplier, service provider or contractor
encountered a situation for which he is not responsible, and could not
have been foreseen at the time of submission of his bid by a reasonable
contractor and that this has led to additional costs and or delays to
him; and
c) Quantification (quantum of the claim) - That the claim has the
necessary supporting documents for its quantification and that these
documents can be considered genuine.
iii. The PROC M, after satisfying him/herself of the legitimacy and validity of
the claim, shall consider the claim as a contract modification.
iv. The claim shall then be handled in accordance with the provisions of the
contract.
Claims for Works Contracts
Claims are likely to arise mainly in works contracts. Modified FIDIC Conditions of
Contract for Works which apply for MCC funded projects provide for specific
procedure for handling claims as provided for under Clause 20.1. Claims shall
require approval of the Employer. However, the Engineer will have determined
the matter before seeking a specific approval. It should only be noted that the
FIDIC conditions provide for a specific time frame within which the Engineer has
to make a decisions, outside which the other party may refer the matter to the
Dispute Adjudication Board. Under Clause 20 FIDIC requires that:
a) A Contractor submits a notification of a potential claim to the engineer as

soon as possible but not later than 28 days of becoming aware of the
circumstances or event;
b) Within 42 days of becoming aware of the event or circumstances, the
Contractor shall submit a fully detailed claim;
c) The Engineer shall respond with approval or disapproval of the claim within
42 days of receiving a full submission from the Contractor; and
d) However, under Conditions of Particular Application (COPA) Sub-Clause 3.1
require that any approval that will lead to extension of time or additional
costs need specific approval of MCA-M4. In some cases, it may be necessary to
refer a claim to MCC or/and MCA-M BD for approval.
Making decisions within the specified time frame is likely to be a major challenge,
especially if the matter has to be referred to the MCA-M BD and MCC.
4
It is noted that Sub-Clause 3.1 of COPA does specify Sub-Clauses under which specific MCA-M
approval shall be required. It is not clear as to what will be the case in the event that a claim is
submitted under a clause other than those stated under Sub-Clause 3.1. The COPA´s need to be
reviewed for every contract.

6.6 Resolution of Disputes
Contractual disputes occur when a party to the contract does not agree with an
action of the other party on the claim that the action is not in accordance with the
contract. However, in most contracts, the specific situation that will be
interpreted as constituting a dispute would be stated. For example, in the MCC
standard conditions of contract for works modified from FIDIC Red Book state
that:
“If the Engineer does not respond within the timeframe defined in this Sub-Clause,
either Party may consider that the claim is rejected by the Engineer and either
Party may refer such claim to the DAB in accordance with Sub-Clause 20.4”
DAB is the Dispute Adjudication Board appointed by both parties, in accordance

with the procedures set out in the contract, to resolve disputes that arise in the
course of the execution of the contract.
In most contracts however, there are no clearly stated procedures for resolving
disputes. For example, in a typical consultant service contract, the Disputes
Resolution Clause requires that parties resolve their disputes amicably failing
which the dispute may be referred to arbitration. There are no clear procedures
prescribed for amicable settlement. In any case, such amicable settlement shall
give priority to the primary project objectives as well as MCA-M interest. As
guidance to resolving disputes, it is important to realize and acknowledge the fact
that:
· Bidding and contract documents are not perfect and can be subject to
interpretation;
· Keeping the larger objective in mind;
· Focusing on the facts and depersonalizing issues; and
· There must be willingness to make reasonable compromises within the
provisions of the contract.
For larger contracts, a detailed description of dispute resolution procedures has

been described. Under the MCC modified FIDIC Conditions of Contract (Red or
Yellow Books) the procedure for appointing DAB within MCA-M in general shall
be as follows:
i. The IE and Project Manager shall identify three names of persons to be

considered for the role. These names shall be submitted to the Project
Manager. Such names could include adjudicators recognized by FIDIC as
listed in the FIDIC President’s list of Adjudicators, in case of Contracts that
use the FIDIC Conditions of Contract (see
http://www1.fidic.org/resources/contracts/adjudicators/adjudicators.ht
ml).
ii. The PM shall request CVs from the persons proposed as well as request for
their willingness to be in the DAB without being committal.
iii. The IE and PM shall scrutinize the CVs in consultation with the PROC M,
LC, PA and MCC as necessary to ensure that the persons proposed are:

· professionals in the relevant area. i.e. health, water, etc. and are
professionally registered as such;
· have played a similar role in the past for at least two projects of
similar nature and size; and
· have no conflict of interest in the project as defined in the current

Millennium Challenge Compact Program Procurement Guidelines.
The PM may require the IE to submit additional names as he considers

necessary.
iv. Once satisfied, the PM shall forward the names of the proposed DAB
members to the MCA-M ED with his evaluation for approval and
appointment, copy to PROC M and the CA.
v. The PROC M shall receive an instruction from the MCA-M ED to write to

the proposed member of DAB informing him/her of the appointment as
well as forwarding the standard agreement for the Dispute Adjudication or
Dispute Adjudication Board, as per provision of the Contract.
vi. The PROC M shall inform MCC of the proposal for their comments if any. It
should be noted that in view of the fact once the DAB member has been
appointed, there shall be a contract signed between MCA-M, Contractor
and the Member. Necessary internal MCA-M contractual and financial
arrangements need to be made The CA should be kept informed.
6.7 Contract Termination
6.7.1 Definition
Contract termination takes place when the parties to the contract are released
from their contractual obligations. Contract termination may be effected in a
number of ways which include by termination by breach of contract, by
agreement between the parties by performance of the party’s contractual
obligations and by frustration. In this section, procedures for contract
termination arising out of breach of contract are presented.
Termination clauses are usually inserted in contracts to give the right to any of
the parties to terminate the contract provided sufficient notice of impending
termination is given to the other party depending on specific provisions in the
contract.
6.7.2 Reasons for Termination

If the performance of the contractor is very poor, and all reasonable attempts to
rectify the poor performance have failed, MCA-M may decide to terminate the
contract in accordance with its provisions for such termination, after having
received approval from MCC.
Termination of the contract should be considered as a final recourse. To start the
procurement process afresh can take considerable time and cause delays for the
project and may result in higher costs. Efforts should be made therefore to
communicate with the other party and to reach an agreement to resolve any
situation of poor performance in accordance with the provisions of the contract.
In any case, contractual loopholes that the contractor can take advantage of
subsequent to the termination or process of avoiding termination have to be
plugged.
As soon as the contractor’s performance starts to deteriorate (delay in planned
delivery dates or poor quality of deliverables), the PM and the IE, should act
swiftly to remedy the problem. This may include calling, writing to or visiting the
other party to ascertain the reasons for the delay or poor quality and then
discussing the details to see what improvements can be made. If such agreement
is not possible, or if the agreement is not respected, MCA-M may decide, as a last
resort, to opt for termination of the contract. The CA should be informed of this
decision.
6.7.3 Procedures for Termination
6.7.3.1 Procedures for Termination of Works Contracts

The steps for terminating a contract due to poor performance are as follows
unless otherwise stated in the specific contract:
a) The PM, in coordination with the IE and the CA, shall prepare a note to the
MCA-M ED recommending termination and giving the contract history to
justify the decision. The PM shall include necessary supporting documents
including previous records of correspondence. A copy shall be made to the
b) The PROC M shall consider and endorse the note (referring for advice first
to PA and then to MCC where appropriate) and send it to the MCA-M ED
for her/his endorsement.
c) The MCA-M ED shall pass the note to the LC who, if in agreement with the
note, prepares a Final Notice that informs the contractor that unless the
matters relating to poor performance are resolved within the given notice
period, then MCA-M intends to terminate the contract as stated in the
contract. The notice period for the termination shall have been stated in
the contract otherwise the letter should state the length of the notice
period. For works contract the notice will be prepared by the Engineer for
Large Works and by the MCA Project Manager for Small Works and
certified by the IE.
d) This Final Notice will be issued by the Employer and delivered to the
Contractor strictly in accordance with the provisions of the contract, if
any5. MCA will consult with MCC prior to the issuance of the Notice. The
Notice shall be copied to the MCA-M ED, PM, PROC M; CFO, PA, the
respective CA and IE and to the issuing bank of the Performance
Guarantee.
e) The PM in consultation with the IE and the Engineer shall continue to
monitor the contractor’s performance during the Notice Period. If the
matters relating to poor performance are not resolved, the PM shall write
a note to the MCA-M ED, copy to the PROC M confirming that termination
5
FIDIC for example has very specific provisions for delivery of such notices.

should take place. Where the contract allows and the situation warrants, a
letter of suspension may be issued prior to the termination letter.
f) The PROC M shall endorse the note and send it to LC who shall prepare a
termination letter that shall be approved by MCA-M ED with copies to
MCA-M ED, PM, PROC M; CFO, PA, FA, the respective CA and IE and will be
issued by the Engineer. MCC should be consulted prior to the issuance of
the termination notice.
g) The termination letter shall be delivered using registered mail or any

other similar method as provided for in the contract with a copy to the
issuing bank of the Performance Guarantee.
h) LC must begin legal procedures to enforce the performance security and to

collect the sum of the guarantee declaring to the bank that the Supplier is
in default under the Contract.
i) The PM and the PROC M shall liaise in order to decide what action to take
after the termination – e.g.; whether to re-launch the procurement or to
find another contractor for the task.
Throughout this process, care should be taken to ensure that there is a minimal
contractual implication for which MCA-M is responsible.
6.7.3.2 Procedure for Termination for Goods Contracts
The steps for terminating a contract due to failure to perform its obligations on
delivery of the goods are as follows unless otherwise stated in the specific
contract:
b) The PM in coordination with the IE and CA, shall prepare a note to the
PROC M and to the CA;
c) The PROC M shall consider and endorse the note (referring for advice first
for her/his endorsement;
d) The MCA-M ED shall pass the note to the LC who, if in agreement with the
note, prepares a Final Notice that informs the Supplier that unless the
matters relating to the performance of the Delivery of Goods and
Completion of obligations are resolved within the given notice period, then
MCA-M intends to terminate the contract as stated in the contract. The
notice period for the termination shall have been stated in the contract
otherwise
e) The PM in consultation with the IE shall continue to monitor the supplier’s
performance to remedy any failure during the Notice Period. If the matters
relating to poor performance or delayed goods are not resolved, the PM
shall write a note to the MCA-M ED, copy to the PROC M confirming that
termination should take place. After the period for remediation stated in
the note, the termination shall become effective immediately;

MCA-M ED, PM, PROC M; CFO, PA, FA, the respective CA and IE;

other similar method as provided for in the contract with a copy to the
issuing bank of the Performance Guarantee;
h) LC must begin legal procedures to enforce the performance security and to

collect the sum of the guarantee declaring to the bank that the Supplier is
in default under the Contract; and
i) The PM and the PROC M shall liaise in order to decide what action to take
find another provider for the goods.
6.7.3.3 Procedure for Termination for Services Contracts
The steps for terminating a contract due to failure or poor performance are as
follows unless otherwise stated in the specific contract:
a) The PM in coordination with the IE and the CA, shall prepare a note to the
b) The PROC M shall consider and endorse the note (referring for advice first
for her/his endorsement.
c) The MCA-M ED shall pass the note to the LC who, if in agreement with the
note, prepares a Final Notice that informs the Consultant that unless the
matters relating to poor performance/or delayed deliveries are resolved
within the given notice period, then MCA-M intends to terminate the
contract as stated in the contract. The notice period for the termination
shall have been stated in the contract otherwise the letter should state the
length of the notice period.
d) This Final Notice will be delivered to the Consultant strictly in accordance
with the provisions of the contract, if any. .The Notice shall be copied to the
MCA-M ED, PM, PROC M; CFO, PA, the respective CA and IE.
e) The PM in consultation with the IE shall continue to monitor the
consultant’s performance during the Notice Period. If the matters relating
to poor performance or delayed deliveries are not resolved, the PM shall
write a note to the MCA-M ED, copy to the PROC M confirming that
termination should take place. After the period for remediation stated in
the note, the termination shall become effective immediately.
MCA-M ED, PM, PROC M; CFO, PA, FA, the respective CA and IE.

other similar method as provided for in the contract.
h) The PM and the PROC M shall liaise in order to decide what action to take
find another consultant for the task.

SECTION VI:
CONTRACT CLOSURE
AND
CONTRACTOR PAST
PERFORMANCE SYSTEM

7.0 Contract Closure and Contractor Past Performance System
7.1.1 Definition
Contract closure involves both product verification (was all work completed
correctly and satisfactorily in accordance with the contract) and administrative
closeout (updating of records to reflect final results and archiving of such
information for future). The contract terms and conditions may prescribe specific
procedures for contract closeout. Early termination of a contract is a special case
of contract closeout.
7.1.2 Procedure
The following are key considerations for Contract Closure:
i) MCA-M contracts will consider to have been completed when:

· All services have been rendered;
· All articles, material, and reports have been delivered and accepted;
· All administrative actions have been accomplished; and
· Final payment has been made to the contractor.
ii) Contract closeout actions are primarily the responsibility of the CA who
has to certify that all services have been rendered satisfactorily and that
all deliverables are acceptable. This certification is issued when inspection
and acceptance has been performed by the IE. PM, PROC M and CFO also
play important roles in confirming clearances of what is in their
jurisdiction. LC also has to certify that all contractual matters have all been
addressed.
iii) Upon completion of the contract, the PROC M will initiate the contract
closure process. The IE, the CA and PM must ensure that:
a) All services have been rendered; all articles have been delivered and
accepted. The contract file must include all inspection and acceptance
documents or a statement from the IE and PM that accordance with the
terms of the contract and are acceptable to MCA-M. Any discrepancies
between performance or delivery and contractual requirements must
be reconciled before the contract file is closed.
b) All payments and collections have been made. The PROC M requests a
confirmation of payments on listed contracts from FA through the
Chief Finance Officer (CFO), identifying the total amount invoiced and
paid.
c) Release from liabilities, obligations, and claims have been obtained
from the contractor. The file must also include documentation settling
questions of disallowed or suspended costs or discrepancies between
payments, deliveries, and billings.
d) All administrative actions have been accomplished and documented

- If there was a subcontract, the file must contain the letter or
document of approval and the subcontract review modification.
- Contract modifications resulting from additions or changes to
contract terms and conditions must be included in the contract file.
- Records relating to MCA-M owned property, documentation
regarding inventories, patents, royalties, copyrights, publications,
and tax exemptions; and correspondence with other agencies must
also be included in the contact file.
7.1.3 Contract Closure Documentation: Contract documentation includes, but is not

limited to, the contract itself along with all supporting schedules, requested and
approved contract changes, any contractor, consultant, supplier or non-
consultant service provider’s developed technical documentation, performance
reports, financial documents such as invoices and payments records, and the
results of any contract-related inspections and acceptance letters, claims if any,
records of disputes, if any and outcomes of their resolution. A complete set of
indexed records should be prepared for inclusion with the final project records.
(contract closure form be attached-Annex 2).
7.1.4 Formal acceptance and closure: The IE, CA and PM responsible for contract
administration should provide the contractor, consultant, supplier or non-
consultant service provider’s with formal written notice that the contract has
been completed. However for works contract the Engineer or project Manager
will issue the Performance Certificate or Completion Certificate. If the
Engineer/Project Manager is not available, in that case the IE and PM may issue
the Performance Certificate or Completion Certificate. Requirements for formal
acceptance and closure will have been defined in the contract.
7.2 Contractor Past Performance Reporting System (CPPRS)
MCC Contractor Past Performance Reporting System (CPPRS) in accordance with

MCC Guidance on Reporting and Considering Past Performance by
Contractors in MCA-M Program Procurements
(http://www.mcc.gov/documents/mcc-ppg-reportingandconsideringpastperf.PHf, April,
2008) requires that MCA-M provides periodic and regular reports on the
performance of contractors (works contractors, suppliers, consultants and non-
consultant service providers) who have been awarded contracts valued or
estimated to be valued in excess of USD $100,0006 a past performance report on
the contractor’s performance is prepared. A CPPR shall be prepared at the end of
each contract irrespective of the duration of the contract provided its value is in
excess of US$ 100,000, otherwise these shall be prepared on annual basis. CPPR
shall be prepared quarterly if one or more aspects of performance are
problematic during the period of contract performance. The implementation of
the CPPRS, as a performance improvement tool, shall be performed as per the
following guidelines, in order to serve as feedback tool.
At least annually and as often as may be required:
i. PROC M will initiate and monitor the CPP process. The relevant PM within
6
Total value or estimated total value should be based on the base period of performance together with
any option periods of performance.

MCA-M shall accurately fill out a past performance report form for each
eligible contractor (contract value > US$100,000) using the CPPRS Evaluation
Form set forth herein (the “CPPRS Evaluation Form” – See Annex 4).
ii. The PM shall submit the duly completed CPPRS Evaluation Form to the MCA-
M PROC M for review.
iii. The PROC M shall then review the report to ensure completeness and clarity,
including placement of appropriate signatures on the CPPRS Evaluation Form.
iv. The PROC M shall forward the CPPRS Evaluation Form to the evaluated
contractor for comments, if any. Notice will be deemed given when
transmitted in accordance with the notice provisions in the evaluated
contractor’s contract, which binds the contractor to being evaluated. From the
time notice is given, the evaluated contractor is given up to 15 calendar days
to provide comments, if any, and/or signatures. The CPPRS must be signed by
the Contractor to complete the process.
v. In case the contractor does not agree with the evaluation, the PROC M shall
require the relevant PM to attempt to reach an acceptable consensus
amicably, failing which the Contractor shall have the right to put in writing
any contrasting comments with supporting evidence.
vi. Upon receipt of any comments and/or signature on the CPPRS Evaluation
Form from the evaluated contractor, or if the time lapses for an evaluated
contractor’s response without any such response, the PROC M shall forward
the CPPRS Evaluation Form to the MCA-M ED, or whoever is acting in his or
her capacity for review and final action.
vii. The MCA-M ED or the person acting in his/her capacity shall provide final
disposition of the contractor’s evaluated performance, including any
adjustments to the overall rating, he or she, in his or her discretion, deems
appropriate. The MCA-M ED’s role here cannot be delegated.
viii. All CPPRS Evaluation Forms must be endorsed by the MCA-M ED or his or her
designee prior to being forwarded to the Contracts and Grants Management
Division at MCC Headquarters.
ix. The MCA-M then forwards a completed past performance record (“CPPRS
Evaluation Report.”), via e-mail, to the Managing Director of the Contracts and
Grants Management Division (mcccpprs@mcc.gov ) at MCC to be incorporated
into the CPPRS database.
x. The e-mail shall be copied to the CA and MCC Country Director for
information.

ANNEX 1: ORGANIZATIONAL CHART FOR PROJECT IMPLEMENTATION
MILLENNIUM CHALLENGE CORPORATION
MCA Mozambique FISCAL AGENT/

FUNDS CONTROL
MCC Board
Mission Executive Committee PROCUREMENT
Management Unit AGENT
Engine Implementing
er Entities
Technical Issues
Vendors /
Contractors
Technical Issues
LEGEND
Engineers involved for Large Works Contracts only

ANNEX 2
MOZAMBIQUE MILLENNIUM CHALLENGE ACCOUNT
PERFORMANCE CERTIFICATION & RECORD OF NO-OBJECTIONS
CONTRACT CLOSE OUT FORM
Each no-objection/certification step is subject to proper certification of each previous step.

Please complete your part ASAP and forward to next step.
Contract Identification number: date:
Name:
amount: MT/US$ Vendor
MCA-M project:
Contract
number: date:
Modification/VO
amount: MT /US$
Contract
number: date:
Modification/VO
amount: MT /US$
Contract
number: date:
Modification/VO
amount: MT /US$
Contract Dispute number:
summary of dispute:
summary of dispute
resolution:
amount: MT /US$
Final Contract
MT /US$
Amount
A - PERFORMANCE / DELIVERY COMPLETE Yes No

If "No", short mention of unperformed or undelivered items:

Basis for closing-out if not completely performed/delivered:
(contract clause - obvious - verbal agreement - written correspondence - …)
Other comments:
No-objection of Project Manager /Contract Manager for contract close-out:
name: signature: date:
B - REQUEST FOR VERIFICATIONS FOR CONTRACT CLOSE OUT

Comments if any:
Name of Procurement
signature: date:
Team Member:
Procurement Manager: signature: date:
C - LEGAL COUNSEL ENDORSEMENT THAT DISPUTES ARE SETTLED
Comments if any:
name: signature: date:
Last
D - FISCAL AGENT CERTIFICATION date:
payment:
Total amount paid: MT/US$ MT/US$
Balance if any: MT/US$ reference:
Comments if any:
FA's name: signature: date:

no-objection:
CFO's name: signature: date:

E - PROPOSED RETURN OF PERFORMANCE SECURITY TO VENDOR (if applicable)
Proposed by Contract
signature: date:
Manager:
Project Manager's
signature: date:
approval:
F - FINAL APPROVAL OF CONTRACT CLOSE-OUT

Contract Managers
signature: date:
approval:
Project Manager´s
signature: date:
approval:
MCA-M ED's approval: signature: date:
G - ACTUAL RETURN OF PERFORMANCE SECURITY TO VENDOR

Project
Manager/Contract signature: date:
Manager's approval:
Legal Counsel
signature: date:
Release:
H - PAYMENT OF RETENTION
Done by FA: signature: date:
I - DECOMMITMENT OF BALANCE OF FUNDS
Recorded by CFO: signature: date:
Recorded by FA: signature: date:
J - ACTUAL DOCUMENT
MOVEMENT
PA/Team Member's
signature: date:
approval:
Procurement Team
signature: date:
Member:
Document Controller's
signature: date:
/Archive Receipt:

ANNEX 3
MILLENNIUM CHALLENGE ACCOUNT MOZAMBIQUE
CONTRACT ADMINISTRATION FORM (CAF)
Sample Format for Contract Administration Form (Excel format shall be used)
PROJECT
IMPLEMENTING ENTITY: FUNDING:
PROCUREMENT REQUISITION NO. TITLE:
CONSULTANCY SERVICES
Contract Ref: Consultant:
Base Period Option Year 1 Option Year 2 Option Year 3 Option Year 4
Forecast Actual Forecast Actual Forecast Actual Forecast Actual Forecast Actual
Date of Contract Signature
Effective Date Factor7
Expected Effective Date
Date of Mobilization
Currency
Total Contract Cost
Duration
Completion Date
Contractor Performance Report Due
Contractor Performance Report Issued
Date of Completion
7
Contractual event that signifies effective date.

Deliverables Forecast Actual
Deliverable 1: (Insert description) Value
Due date
Due date
Due date
Due date
Due date
Contract Modifications
Modifications8 Date of MCC Approval Date of Modification9 Revised Cost Revised Duration Revised Completion
Date
Modification 1
Modification 2
Modification 3
Modification 4
Modification 5
Modification 6
Modification 7
Modification 8
NOTES TO THE CONTRACT ADMINISTRATION FORM

1. The draft version of this template must accompany the Contract Cover Sheet.
2. Once the contract is signed this form must be updated with actual signature dates and revised deliverable dates.
3. The form should then be emailed to: the Project Manager, Procurement Manager and Fiscal Agent.
4. Diarise all key dates.
8
Contractual modifications or variations approved by relevant authority – either ED, MCA-M BD or MCC.
9
Date of the approval of the modification or variation.

5. From the contract, identify the period of notice required to exercise the Option Period and diarise at least 1 month in advance.
6. Indicate in the PA's monthly report, the key deliverables/activities expected the next month for each contract.
7. Monitor the diary entries on a monthly basis and advise the PM, by email, of each contract deliverable due the forthcoming month.
8. Ensure the Contractor Performance Report is undertaken and submitted to the PROC M on time where applicable.

ANNEX 4
CONTRACT ADMINISTRATION FORM (CAF)
Sample Format for Contract Administration Form (Excel format shall be used)
IMPLEMENTING ENTITY: PROJECT FUNDING:

PROCUREMENT REQUISITION
NO. TITLE:
WORKS Modifications
Contract Ref: Contractor: Modifications Date of MCC Date of BOD Date of Revised Cost Revised Revised
[2] Approval Approval Modification[3] duration Completion
Date
Forecast Actual
Date of Contract Signature
Effective Date Factor[1]
Expected Effective Date
Date of Mobilization
Currency
Total Contract Cost
Duration
Completion Date
Performance Security date
Advance Payment Security date
Insurance submission date

Insurance due date
Contractor Performance Report
Due
Contractor Performance Report
Issued
Date of Completion
Invoices (BOQ measures and Forecast Actual Invoices (BOQ measures and cost) Forecast Actual
cost)
Month 1: (Insert Due Month 14: (Insert

description) Date description) Due Date
Value Value
Due Month 15: (Insert
Month 2: (Insert description) Date description) Due Date
Value Value
Value Value
Value Value
Value Value
Value Value
Value Value
Value Value

Value Value
Value Value
Value Value
Value Value
Value Value
NOTES TO THE CONTRACT ADMINISTRATION FORM
1. The draft version of this template must accompany the Contract Cover Sheet.
2. Once the contract is signed this form must be updated with actual signature dates and revised deliverable dates.
3. The form should then be emailed to: the Project Manager, Procurement Manager and Fiscal Agent.
4. Diarise all key dates.
5. From the contract, identify the period of notice required to exercise the Option Period and diarise at least 1 month in advance.
6. Indicate in the PA's monthly report, the key deliverables/activities expected the next month for each contract.
7. Monitor the diary entries on a monthly basis and advise the PM, by email, of each contract deliverable due the forthcoming month.
8. Ensure the Contractor Performance Report is undertaken and submitted to the PROC M on time where applicable.

ANNEX 5
THE REPUBLIC OF MOZAMBIQUE
Contractor Past Performance Reporting System

(CPPRS)
CPPRS EVALUATION FORM
CPPRS EVALUATION FORM

[ ] Final [ ] Interim – Period Report: From _______________________ to
____________________________--
Note: CONTINUATION SHEETS MAY BE USED IF MORE SPACE IS REQUIRED
(See Rating Guidelines & Block-by-block Instructions below)
1. Contractor Name and Address: 2. Contract Number:
_______________________________________________ _________________________
_______________________________________________ 3. Contract Value (Base
_______________________________________________ plus Options):
_______________________________________________ _________________________
4. Contract Award Date:
1a. Country Location _________________________
_______________________________________________ 5. Contract Completion
Date:
__________________________
6. Category of Procurement (Check all that apply)
Goods [ ] Works [ ]Consulting Services [ ] Non-Consulting Services [ ]

6a. Subcontract (s)? yes [ ] no [ ] 6b. Consortium? Yes [ ] no. [ ]
If yes, name of 1st Tier Sub If yes, name of other members:
7. Description and Location of Requirement:
8. Ratings. Summarize contractor performance and circle in the column on the right the
number which corresponds to the performance rating for each rating category. Please see
below for an explanation of rating scale.
A. Quality of the Product or Service Comments: 0
1
2
3
4
5

B. Cost Control (Cost Reimbursement only) Comments: 0
1
2
3
4
5
C. Timeliness of Performance Comments: 0

1
2
3
4
5
D. Business Relations Comments: 0

1
2
3
4
5
E. Performance of Key Personnel:

Name: ________________________ Employment Dates ____________________ 0
Title: _________________________ Employment Dates ____________________ 1
Comments/Rating: 2
__________________________________________________________________________________________________ 3
__________________________________________________________________________________________________ 4
_______________________________________________________________________________________________ 5
Name: ________________________ Employment Dates ____________________ 0

Comments/Rating: 2
__________________________________________________________________________________________________ 3
__________________________________________________________________________________________________ 4
_______________________________________________________________________________________________ 5
Name: ________________________ Employment Dates ____________________

Comments/Rating: 1
__________________________________________________________________________________________________ 2
__________________________________________________________________________________________________ 3
_______________________________________________________________________________________________ 4
AVERAGE SCORE FOR 8E 5
9. VG. Score: (Add the ratings of 8A – 8E and divide by 5 or number of areas rated if less than 5)
10. Would you select this firm again? Please explain.
11. MCA-M Project Manager Name: Signature:

____________________________________________________ _____________________________

Phone/Fax/Internet Address: Date:
____________________________________________________ _____________________________
11A. Approval by the Procurement Manager: [ ] Yes [ ] No
Signature ______________________________________________ Date:

_________________________________________
12. Contractor’s Review. Were comments or additional information provided?

[ ] Yes [ ] No. If yes, please attach. Number of Pages of Attachment ____________________
13. Contractor’s Name:
_____________________________ Signature:
Phone/Fax/Internet Address: _______________________________
___________________________________________________
Date:
_______________________________
14. MCA-M Review. Were contractor’s comments reviewed by the Executive Director of the
MCA-M?
[ ] Yes [ ] No. If yes, please attach comments of MCA Executive Director /ED.
Number of Pages of Comments ______________________________
15. Final Ratings. Reassess the Block 8 ratings based on contractor’s comments and MCA
Executive Director /ED review. Revise block 8 rating, if appropriate and indicate the new
scores in areas A-E.
A. Quality ____________ B. Cost Control_________ C. Timeliness
_______________________
D. Business Relations
________________
E. Performance of Key
Personnel___________
________________
16. Final AVG. Score (Add the ratings of 15A – 15E and divide by 5 or areas rated if less than 5).
___________
17. MCA ED Name:

____________________________________________ Signature:
Phone/ Fax/Internet Address: _____________________________
Maputo: Av. Ahmed Sekou Touré nº2539, C.P. nº2038, Tel: (+258)21333920
Fax: (+258)21333921
Date:
Webside: http://www.mca.gov.mz | E-mail: support@mca.gov.mz
_____________________________
END OF FORM

Quality of Product or Service
0 = Unsatisfactory 1 = Poor 2 = Fair 3 = Good 4 = Excellent 5 = Outstanding
Unsatisfactory Non-conformances are jeopardizing the achievement of contract
requirements, despite use of MCA-M resources. Recovery is not likely.
If performance cannot be substantially corrected, it constitutes a
significant impediment in consideration for future awards containing
similar requirements.
Poor Overall compliance requires significant MCA-M resources to ensure
achievement of contract requirements.
Fair Overall compliance requires minor MCA-M resources to ensure
achievement of contract requirements.
Good There are no, or very minimal, quality problems, and the Contractor
has met the contract requirements.
Excellent There are no quality issues, and the Contractor has substantially
exceeded the contract performance requirements without
commensurate additional costs to the MCA-M.
Outstanding The contractor has demonstrated an outstanding performance level
that was significantly in excess of anticipated achievements and is
commendable as an example for others, so that it justifies adding a
point to the score. It is expected that this rating will be used in those
rare circumstances where contractor performance clearly exceeds the
performance levels described as "Excellent".
Cost Control (Cost Reimbursement only)
Unsatisfactory Ability to manage cost issues is jeopardizing performance of contract
requirements, despite use of MCA-M resources. Recovery is not likely.
If performance cannot be substantially corrected, this level of ability to
manage cost issues constitutes a significant impediment in
consideration for future awards.
Poor Ability to manage cost issues requires significant MCA-M resources to
ensure achievement of contract requirements.
Fair Ability to control cost issues requires minor MCA-M resources to
ensure achievement of contract requirements.
Good There are no, or very minimal, cost management issues and the
Contractor has met the contract requirements.
Excellent There are no cost management issues and the Contractor has exceeded
the contract requirements, achieving cost savings to the MCA-M.
that justifies adding a point to the score. It is expected that this rating
will be used in those rare circumstances where the contractor achieved
cost savings and performance clearly exceeds the performance levels
described as "Excellent".

Timeliness of Performance
Unsatisfactory Delays are jeopardizing the achievement of contract requirements,
despite use of MCA-M resources. Recovery is not likely. If performance
cannot be substantially corrected, it constitutes a significant
impediment in consideration for future awards.
Poor Delays require significant MCA-M resources to ensure achievement of
contract requirements.
Fair Delays require minor MCA-M resources to ensure achievement of
contract requirements.
Good There are no, or minimal, delays that impact achievement of contract
requirements.
Excellent There are no delays and the contractor has exceeded the agreed upon
time schedule.
will be used in those rare circumstances where contractor
performance clearly exceeds the performance levels described as
"Excellent".
Business Relations
Unsatisfactory Response to inquiries and/or technical, service, administrative issues
is not effective. If not substantially mitigated or corrected it should
constitute a significant impediment in considerations for future
awards.
Poor Response to inquiries and/or technical, service, administrative issues
is marginally effective.
Fair Response to inquiries and/or technical, service, administrative issues
is somewhat effective.
Good Response to inquiries and/or technical, service, administrative issues
is consistently effective.
Excellent Response to inquiries and/or technical, service, administrative issues
exceeds Government expectation.
will be used in those rare circumstances where contractor
performance clearly exceeds the performance levels described as
"Excellent".

Key Personnel
Unsatisfactory Personnel listed as Key were ineffective in the key position to which
they were assigned. They were not effective or efficient in managing
the project(s) under contract. Their qualifications were overstated for
the effort we received in their critical area. They were consistently
inaccessible to address critical issues. Deliverables were consistently
late or unsatisfactory and did not meet the MCA-M needs.
Poor Personnel listed as Key were usually not effective in the key position to
which they were assigned. There were many issues concerning the
project(s) under their cognizance that were not addressed to the MCA-
M Entity’s satisfaction. They were often inaccessible to address critical
issues in a timely manner. Deliverables were often late, of poor quality
and/or not helpful towards the MCA-M’s needs.
Fair Personnel listed as Key were marginally effective in the key position to
which they were assigned. They provided minimal effort required
under the contract. They were inaccessible on occasion when critical
issues arose and provided minimal support in addressing the issues.
Deliverables were sometimes late or of mediocre quality and
inconsistent in terms of whether they were helpful given the MCA-M’s
needs.
Good Personnel listed as Key were effective in the key position to which they
were assigned. They were effective and efficient in managing the
project(s) under contract as stated. They were accessible at key times
to address critical issues. Deliverables were on-time, of adequate
quality and met the MCA-M’s needs.
Excellent Personnel listed as Key were highly effective and efficient in the key
position to which they were assigned. They did an excellent job in
managing the project(s) under contract. They were consistently
inaccessible to address critical issues. Deliverables were consistently
late, of poor quality and/or not helpful towards the MCA-M needs.
Outstanding Personnel listed as Key were extremely efficient and effective in the
key position to which they were assigned and went over and above to
help in other areas as well. They did an outstanding job in managing
the project(s) under contract. They were always accessible to address
and aid in solving critical issues that arose under the contract.
Deliverables were consistently on time, of high quality and always met
the MCA-M expectations.

Key to filling the CPPRS
Block 1: Contractor name and address. Identify the specific division of the
company being evaluated if there is more than one.
Block 1a: Identify the country location where work is being performed.
Block 2: Contract number of contract being evaluated.
Block 3: Contract dollar value shall include base period plus all options. If funding
is Increased, or decreased during the evaluation period, it should be
reflected in the overall value.
Block 4: Contract award date.
Block 5: Contract completion date.
Block 6: Category of Procurement: Check all that apply.
Block 6a: List the name of the 1st tier subcontractor, if applicable.
Block 6b: List the members of the consortium, if applicable.
Block 7: Provide a brief description and location of the procurement.
Block 8: Circle rating in far right columns and provide a very brief narrative
summarizing performance for the category being rated. Use the rating
guidelines included herein. List the names and employment dates of the
contractor’s key personnel. This provides a record of how long these
managers worked on the contract. If there were many management
changes, a second page may be necessary. On the comment/rating line,
briefly describe and rate the overall performance of the Key personnel.
Average the score for all key personnel and place in the space provided at
8E.
Block 9: Calculate the average score for 8A-E and enter under item 9.
Block 10: If given a choice, please explain why you would or would not select the
contractor to perform work on behalf of the MCA-M again.
Block 11: Within the MC-T, it is intended that the Project Manager has completed
blocks 1 through 10 and should sign this block.
Block 11A: Within the MCA-M, it is intended that the Procurement Manager shall
endorse this block, indicating that he/she has reviewed the initial report
and rating and is in supports the report.
Block 12-13: Contractor’s Review: The contractor should be provided an opportunity
to review and endorse the past performance report. Forward the
completed report (through block 11A to the Contractor) and instruct them
to review and sign the document on block 12 within not later than 15
calendar days of the date of your instruction to indicate receipt of the
rating. If comments are unfavorable, the contractor must be afforded an
opportunity to comment. More time may be granted, as reasonable, but
should not extend beyond a maximum of 30 calendar days from the date of
your instructions. Signature by the Contractor does not necessarily
indicate agreement. If concern or disagreement is received from the
contractor, additional MCA-M review at a level higher than the MCA
Project Manager/Procurement Manager is required.

Block 14: MCA-M Review: This is the review by the ED of the MCA-M. Review cannot
be delegated. Comments should be provided, as necessary. Attach
additional pages as needed.
Block 15: After the MCA-M review, the ED computes a final rating, if necessary based
on Contractor comments, and enters the final rating. The final rating may
remain unchanged from the original rating of item 9, or it may be revised.
Either way, a final rating is required to be entered here by the ED.
Block 16: Calculate the average score for 15A-15E and enter in this block.
Block 17: The MCA-M ED’s signature certifies that they have reviewed the entire file
and have either concurred with the original rating or established a
different final rating. Once complete with this process, the record
contains the original report and rating signed by the Project Manager,
endorsed by the Procurement Manager, with a signature reflecting review,
and comment if necessary, by the contractor, as well as, a final rating and
signature of a MCA-M ED with comments, as necessary. This entire
package should be e-mailed to the Managing Director of the Contracts and
Grants Management Division at MCC Headquarters (at the e-mail address
found on the main www.MCC.gov website under the Procurement Link:
http://www.mcc.gov/ procurement/index.sdp.

ANNEX 6-
GOODS RECEIPT FORM
NAME OF THE ORGANIZATION: MCA - MOZAMBIQUE
PURCHASE ORDER NR.:
NAME OF THE PERSON RECEIVING THE GOODS:
DESIGNATION OF THE PERSON RECEIVING GOODS:
PHONE NUMBER OF PERSON RECEIVING GOODS:
ARE ALL LINE ITEMS QUANTITY OF

COMPLIANCE
ITEM SUPPLIED AS PER PURCHASE GOODS (AS PER STORAGE
ITEM DESCRIPTION DELIVERY PLACE WITH
NR. ORDER CONDITIONS OR NOT PURCHASE ORDER LOCATION
SPECIFICATION
IF NOT PROVIDE COMMENTS OR NOT)
COMMENTS/RECEIPT:
DATE OF
RECEIVED BY (SIGNATURE)
RECEIPT

Annex 7.
Contract Administration Information Flow Chart
Procurement Agent (PA) prepares the

Contract Administration Form (CAF)
immediately after Contract Signature and
sends it to the Procurement Manager
PROC M Examines the submission – s/he

may consult with other experts under her
/his disposal.
Is the CAF PROC M returns the form to the relevant PA with

complete and relevant comments for amendment
accurate?
PA includes list of contract deliverables in the monthly

PROC M submits CAF to relevant PM for
reports to PROC M for information and action
use in tracking Contract Performance- PA
PM uses the CAF to record and track PROC M sends regular notifications to the relevant PM
contract performance based on the basis of
Feedback
Are contractors
performing/adhering PM takes appropriate contractual steps after consulting
to the delivery PROC M, Legal Counsel and MCC where necessary
schedule?
Feedback
PM keeps monitoring until the contract is

successfully concluded.
PM ensure that the date of actual PROC M Files a copy of the CAF in the relevant
completion is indicated in the CAF and cc Procurement Files for Audit purposes.
sent to PROC M after Contract
Completion

Annex 8. Contract Modification/Change Order Flow Chart
Variation process (1)

Week 1 Week 2 Week 3 Week 4
Day 1 Day 2 Day 3 Day 4 Day 5 Day 6 Day 7 Day 8 Day 9 Day 10 Day 11 Day 12 Day 13 Day 14 Day 15 Day 16 Day 17 Day 18 Day 19 Day 20
ED passes VO
FA & PA
to FA & PA &
each
Eng. as Project
Engineer receive a
MCA Amdinistrator
finalises a Engineer copy
forwards [2 days]
VO with submits it
to PM and
oversight to MCA
ED
from PA. VO PM reviews VO.
within If satisfied
limits of passes to ED for
action [2 days]
Engineer's
authority
to instruct, or Engineer IE finalises
accept a sends recommendation
proposal, for copy to IE s & comments to
a Variation accept or reject
Engineer ESR recom- the VO and
sends mends to accept passes to PM [2
copy to or reject VO [2 days]
ESR days]
Engineer ESR recom- IE finalises

sends mends to accept recommendation
copy to or reject VO [2 s & comments to
ESR days] accept or reject
the VO and
passes to PM [2
Engineer days] copied to
sends MCC for early
copy to IE warning
Engineer
finalises a
PM reviews VO.
VO with
If satisfied
oversight
passes to ED for
from PA. VO
action [2 days]
outwith copied to MCC
MCA
limits of Engineer
forwards
for early
Engineer's submits it warning
to PM and
to MCA
authority ED
ED approves
Board Approval when
for submis-
required in accordance to No
sion to MCC
MCC Procurement Guidelines Objection
and Board [2 FA & PA
[3 working days] (2) received by
days] each
ED who
receive a
passes to
Engineer copy
Engineer &
sends MCC no objection when required in accordance to
MCA start to consider the VO and prepare for approval process FA & PA
copy to MCC Procurement Guidelines[5 working days] (3)
MCC

Key
PM Project Manager
ED Executive Director
ESR Employer's Site Representative
PA Procurement Agent
FA Fiscal Agent
VO Variation Order
Days Working days
Lightly shaded arrows represent early warning of impending need to take urgent action
Notes
1 No loop back in the process has been considered for correction or modification to a previous stage. So, the above might be a best case scenario
if an individual VO (i) raises a contract which did not require approval treshold, or (2) extends the original contract duration by 25% or more, or (iii) increases the original contract value by 10% or
2
1 million USD or more (whichever may apply)
if an individual VO (i) raises a contract which did not require approval treshold, or (2) extends the original contract duration by 25% or more, or (iii) increases the original contract value by 10% or
3 1 million USD or more (whichever may apply). Once the 10% contract (or 1 million USD) treshold has been reached, any subsequent VO that individually or collectively exceeds 3% of the original contract
value will also require MCC approval

ANNEX 9: IPC PROCES
Inputs from MCA

Independent Engineer
Millennium Challenge
Clea Account – Mozambique
ranc
e of (MCA)
Certi
ficat
ions
MCA Project C R
e e
rt vi
if si
ic o
C Copy of a n
o Certification
Engineer
or
di
n
at Su
io b
mi R
ss ev
Implementing Entities isi
io
ns o
n
Preparation of
measurements by the
Contractors for
Certification

ANNEX 10: MCA-M and IE RESPONSIBILITIES UNDER CONTRACT
ADMINISTRATION – GOODS CONTRACTS

ANNEX 11: MCA-M and IE RESPONSIBILITIES UNDER CONTRACT
ADMINISTRATION – SERVICES CONTRACTS


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MILLENNIUM CHALLENGE ACCOUNT – MOZAMBIQUE

Contract Administration Guidelines Page 1

SECTION I: OVERVIEW OF CONTRACT ADMINISTRATION AND

1.0 Overview of Contract Administration

2.0 Principles of Effective Contract Administration

SECTION II: CONTRACT ADMINISTRATION PROCEDURES FOR

3.0 Contract Administration Procedures For Works

Contract Administration Guidelines Page 2

4.0 Contract Administration Procedures For Goods

SECTION IV: CONTRACT ADMINISTRATION PROCEDURES FOR

5.0 Contract Administration Procedures for Intellectual Services

Contract Administration Guidelines Page 3

SECTION V: CONTRACT MODIFICATION PROCEDURES

6.0 Contract Modification Procedures

SECTION VI: CONTRACT CLOSURE AND CONTRACTOR PAST

7.0 Contract Closure And Contractor Performance Reporting

Contract Administration Guidelines Page 4

Contract Administration Guidelines Page 5

Table 3.1: Sample Agenda for the Kick-off/Pre-Commencement Meeting – Works

Contract Administration Guidelines Page 6

Contract Administration Guidelines Page 7

Contract Administration Guidelines Page 8

1.0 OVERVIEW OF CONTRACT ADMINISTRATION

Contract Administration Guidelines Page 9

1.3 Contract Administration Functions

Contract Administration Guidelines Page 10

The Contract Administration Guidelines have been prepared to address these

Contract Administration Guidelines Page 11

2.2 Contract Administration Principles

Contract Administration Guidelines Page 12

Acronyms Full Identification Contract Administration Main Role

ED Executive Director Gives the final authorization for

DED Deputy Executive Performs all the duties assigned by and

PM Project Manager Monitor performance of contractors,

Water Supply & The PM role for the specific Project.

Roads Project The PM role for the specific Project.

Contract Administration Guidelines Page 13

Land Tenure Services The PM role for the specific Project.

Farmer Income Support The PM role for the specific Project.

PC Project Coordinators The designated person for a particular

CA Contract Administrator CA is responsible for assuring that all

PROC M Procurement Manager Reviews and approves all contracts

ESR Employer Site Assist the PM and PC in their duties.

CFO Chief Financial Officer Receives reviews and validates the

Contract Administration Guidelines Page 14

LC Legal Counsel Provides legal advice, validates and

MCC Millennium Challenge Monitors and approves actions of

BD Board of Directors Approves actions of contract

IE Implementing Entity Monitors and coordinates the activities

PA Procurement Agent Prepares the CAF, keeps track of

FA Fiscal Agent Receives reviews and certifies all the

Contract Administration Guidelines Page 15

Contract Administration Guidelines Page 16

3.0 CONTRACT ADMINISTRATION PROCEDURES FOR WORKS

These are discussed in detail in the following sections.

3.2 Contract Administration System (CAS)

Following contract signature, the Engineer is primarily responsible for

Contract Administration Guidelines Page 17

3.3.2 Planning Meeting for the Kick-off Meeting