9. Donor Contract Management
The purpose of donor contract management is to ensure that the key stakeholders have, and can use, accurate contract information and documentation about the management and implementation of emergency projects. This is critical to ensure accountability and compliance with donor and CARE International Member contractual regulations and guidelines (including those relating to procurement and meeting reporting requirements).
Emergency operations usually include activities funded by many donors with contracts all starting at a similar time at the onset of the emergency. The requirements for effective donor contract management in the emergency context can often overwhelm the normal systems of the CO, in particular at the start of the emergency, and can lead to compliance problems later during implementation. To avoid problems, it is important to put in place contract management systems adequate to the emergency requirements as quickly as possible.
Emergency projects are also often implemented in a rapidly changing environment where activities are adapted to meet the urgent humanitarian needs. Without careful and specific attention to donor contract management, emergency operations can end up varying significantly from the original contract, or not meet compliance requirements. This can result in the creation of liabilities for CARE, as well as damage to CARE’s reputation and relationship with donors.
These guidelines provide practical advice for putting effective donor contract management systems in place in an emergency situation. In addition to these guidelines, existing CO and Lead Member policies, systems and procedures should be adhered to unless the appropriate authority within the CO grants exemption.
1.1 CI roles and responsibilities for contract management
1.2 Contract management functions in an emergency response team
- Ensure all key staff and the CARE International Member are aware of compliance obligations.
- Ensure the correct donor formats and guidelines are used.
- Review contractual issues at the proposal development stage to ensure that the CO can comply with the terms and conditions.
- Create and maintain a tracking mechanism for all concept papers and submitted proposals.
- Before signing the donor contract, ensure that the CARE International Member and the CO have reviewed the donor contract, and made an informed decision to accept the terms and conditions.
- During project inception, ensure that the project implementation team receives all necessary background briefing and documentation.
- Seek, track and document the required approvals for any changes to the contract.
- Maintain a clear document trail throughout the project cycle.
- Check the legal status of CARE’s operations in the country and any impact on contracts.
- Ensure all managers are aware of contract compliance obligations.
- Be aware of any exceptions/exemptions under donor emergency guidelines.
There are donor contract compliance obligations during emergencies as at any other time. However, there may be exceptions/exemptions under donor emergency guidelines that the CO should be are aware of. Key donor contract compliance areas that need to be considered include:
- eligible expenditure-what costs may or may not be charged to a particular project according to donor regulations
- period of project expenditure-the start and end dates of when expenditure may be charged to a project
- procurement regulations
- flexibility/approval for changes to the project design including project budget
- cash flow/payment schedule
- monitoring and reporting
- record keeping.
General guidance (i.e. non-emergency specific) on contract compliance is available at Annex 10.2 Chapter Five-Contract compliance, ‘The Basics of Project Implementation-A Guide for Project Managers’ (November 2007).
- Use correct donor formats and guidelines.
- Ensure good coordination between the CO, the submitting CARE member and the donor during the proposal submission phase.
- Conduct a preliminary review of potential financial and contractual issues.
- Review PIFA and IPIA status.
- Establish and maintain a tracking mechanism for all concept papers and proposals.
Effective donor contract management starts at the stage of proposal development and submission. This section covers the period when a project proposal is being prepared and reviewed prior to submission to the donor via the relevant partner CARE International Member for the project.
It is important that staff involved in contract management and compliance is engaged in this early stage to ensure that contract management and compliance issues are addressed throughout the project cycle. Doing so will help to minimise difficult contract management and compliance issues having to be resolved at a later stage.
It is also very important to ensure accountability that a clear document trail is maintained throughout the project cycle starting from the time the project proposal is prepared. The staff involved in drafting the project proposal may not be the staff who is involved at the time of signing the donor contract, and/or implementing the project and/or reporting on the project.
4.1 Using correct donor formats and guidelines
4.2 Coordination arrangements with CARE International Members and donors
4.3 Preliminary review of potential financial and contractual issues
4.4 Review of PIFA and IPIA status
- Review contractual aspects before signing the donor contract.
- Sign an IPIA as soon as possible after signing the donor project contract.
Before signing the donor contract (otherwise known as an Agreement, Grant, Service Order, etc.), both the CARE International Member and the CO have properly reviewed the donor contract and made an informed decision to accept the terms and conditions. The guidelines in sections 5.1 and 5.2 will assist in this.
5.1 Reviewing and approving signature of the contract
5.2 Preparation of IPIA
- Establish project core files.
- Provide documentation and briefing to project implementation and support staff.
The project staff responsible for project implementation in an emergency will often be different from those who prepared the proposal. It is important that the project implementation team receives all the necessary background briefing and documentation to ensure effective contractual compliance during implementation.
6.1 Project core files
6.2 Documentation and briefing to project implementation and support staff
- Monitor contract compliance and manage the required changes.
- Ensure that sub-contracts meet CARE International Member requirements.
- Regularly monitor the central Donor Contract Management Information Matrix.
- Ensure that narrative and financial reports are prepared, reviewed and submitted on time to the CARE International Member and donor.
There is a need to monitor contract compliance throughout the duration of the project. Due to rapidly changing circumstances in an emergency context, there can also be a need to change the project design (e.g. project objective or outputs, and the associated budget line items). It is important to seek, track and document the required approvals for any changes.
7.1 Monitoring contract compliance and managing required changes
7.2 Managing sub-grants
- Maintain a clear document trail.
- Retain core documents after the completion of the project.
Staff turnover is very rapid in an emergency. The staff involved in drafting the project proposal may not be the same staff involved in implementing or reporting on the project. It is very important for later accountability that a clear document trail is maintained throughout the project cycle and that the core document files are retained well after the project has been completed. Maintain hardcopy and softcopy files of all core project documentation listed in section 6.1 until well after project completion, in accordance with CO filing and archival procedures (see also Chapter 18 Administration).
- Obtain assistance from the Temporary Presence Coordinator or new Lead Member.
- Check the legal status of CARE’s operations in the country and any impact on contracts.
In an emergency operation where there is not an existing CARE presence (CO), the lack of existing CO-level policies, systems and procedures to ensure appropriate contract management can be problematic. In such situations, CARE International Members (either with Temporary Presence responsibilities or as project partners) may need to provide additional support to the field office and assist with roles normally undertaken by a CO, e.g. ongoing contract administration, reporting and document retention. In these cases, often the Lead Member, instead of a formal CO, will sign IPIAs.
One potentially critical issue is the legal status of CARE’s operations where no prior agreement with the host government exists. This may affect issues such as tax exemption, the ability to sign contracts in-country and other legal issues.