Fctors Affect Contract Management on Achieving Value for Money

CHAPTER ONE
OVERVIEW OF THE STUDY
      1.1 Introduction
This chapter presents components of the proposal that provide the context for the study. It includes background to the study, statement of the problem, research objectives, research questions, significance of the study and organization of the study.
      1.2 Background to the study
Today government all over the world have played an important role in reducing costs by negotiating the best possible prices, terms and conditions in their contract with the suppliers or contractors. However without an effective contract management program these savings will remain captured saving only, the benefit of effective contract management do not end with cost saving. Effective contract management can also pay an important role in mitigation the supply chain risks that the organization faces.

Procurement contract management is the process of systematically and efficiently managing contract creation, execution and analysis for maximizing operational and financial performance and minimizing risk. It also to a closely includes following up and monitoring its implementation so that immediate action can be taken whenever a problem occurs (ITC, 2000)

Contract Management is an issue of strategic importance both organizations and to projects. Through successful contract management organizations can increase control, increase effectiveness and reduce costs and also provide strategic and competitive advantages. This applies to all kinds of organizations regardless of size or line of business. An organization that fails to pay attention to the contract process it leads to poor management of contracts that means they incur huge risk taking and lots of excess costs.

Regulation, 243 of Tanzania PPA No.7 of 2011 requires Procuring Entities (PE’s) to be responsible for effective management of any procurement of service or works contract which is undertaking in accordance with the terms of each contract.
According to...