Unit of competency details

PSPPROC503A - Manage contract performance (Release 1)


ReleaseStatusRelease date
1 1 (this release)Current 10/Mar/2009

Usage recommendation:
Is superseded by and equivalent to PSPPROC503B - Manage contract performanceRevised to include environmental, sustainability and corporate social responsibility principles. 04/May/2009

Training packages that include this unit


SchemeCodeClassification value
ASCED Module/Unit of Competency Field of Education Identifier 080301 Business Management  

Classification history

SchemeCodeClassification valueStart dateEnd date
ASCED Module/Unit of Competency Field of Education Identifier 080301 Business Management  24/May/2005 
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Modification History

Unit Descriptor

This unit covers the implementation of strategies that ensure effective contract performance by officers whose primary role is contract management, and who may or may not have had involvement in the procurement process preceding execution of the contract.

PSPPROC410A Administer contracts  is the appropriate unit for officers undertaking contract management as a minor part of their work role.

The unit includes managing of the business relationship, managing performance of the contract, managing contract issues, and implementing a communication/information strategy.

In practice, managing contract performance may overlap with other public sector generalist and specialist work activities such as acting ethically, complying with legislation, providing client service, providing leadership, developing policy, undertaking negotiations etc.

This is one of 4 units of competency in the Procurement&Contract Management  Competency field that address the requirements of contract management performed by specialist contract managers.

Related units are:

PSPPROC501A Manage contract riskPSPPROC502A Establish contract management arrangements PSPPROC504A Finalise contracts

The superseded unit PSPPROC404A Manage contracts  is equivalent to the three units:

PSPPROC502A Establish contract management arrangements + PSPPROC503A Manage contract performance + PSPPROC504A Finalise contracts

Equivalence may be claimed for EITHER:

PSPPROC410A Administer contracts ORPSPPROC502A - 504A inclusive, but not both.

This is a new unit of competency, added to the Procurement&Contract Management  Competency field of the Training Package in 2004.

Application of the Unit

Licensing/Regulatory Information


Employability Skills Information

This unit contains employability skills.

Elements and Performance Criteria Pre-Content

Elements are the essential outcomes of the unit of competency.

Together, performance criteria specify the requirements for competent performance. Text in bold italics  is explained in the Range Statement following.

Elements and Performance Criteria

Elements and Performance Criteria 


Performance Criteria 


Manage the business relationship 


Probity  is managed in accordance with organisational requirements, legislation, policy and public sector standards 


Obligations to the contractor are met in accordance with contractual arrangements


Consideration of conflicts of interest and their resolution are recorded in accordance with public sector standards and organisational requirements


Relationship with contractor is managed through formal and informal mechanisms  in accordance with organisational policy and procedures


Business relationship is managed in the public interest in accordance with public sector standards and organisational requirements


Manage performance of the contract 


Start-up or transition arrangements are implemented in accordance with contract requirements and organisational procedures


Contract management plan  is monitored for effectiveness on a regular basis and adapted as necessary during the life of the contract


Performance of the contract  is monitored against key performance indicators and tracking milestones to ensure all obligations under the agreement are being met


E-procurement, financial and other resources are managed as necessary in accordance with contractual requirements and organisational procedures


Emerging and potential risks  are identified and managed in accordance with organisational risk management procedures


Manage contract issues 


Contract variations  are managed in accordance with the contract management plan and organisational policy and procedures


Early signs of under-performance  are identified and action  is taken to improve performance to the agreed level and is documented in accordance with the contract communication/information policy


Disputes /complaints are investigated and resolved  or referred in accordance with contract management plan and contractual arrangements


Negotiation  of issues relating to the contract is conducted and approvals are obtained in accordance with stipulations in the contract


Conflict is addressed and resolved where possible or other actions  are taken in accordance with contractual arrangements


Implement communication/information strategy 


Communication  on the performance of the contract is maintained with all stakeholders in accordance with organisational protocols and public sector standards


Management reporting is carried out in accordance with tracking milestones and organisational requirements


Contract information is maintained for organisational purposes  in accordance with organisational policy and procedures

Required Skills and Knowledge


This section describes the essential skills and knowledge and their level, required for this unit.

Skill requirements 

Look for evidence that confirms skills in:

using communication and negotiation with contractor and stakeholders involving complex oral and written exchanges

reading and applying complex documents such as contracts, legislation and guidelines

resolving disputes/conflict/complaints or making judgments about when to refer them to others

building/managing effective working relationships

writing management reports and keeping records of meetings, liaisons, notes and follow-up action, requiring precision of expression

responding to diversity, including gender and disability

applying occupational health and safety and environmental requirements in the context of contract management

Knowledge requirements 

Look for evidence that confirms knowledge and understanding of:

Commonwealth/State/Territory Government legislation, policies, practices and guidelines relating to contract management, including environmental purchasing guidance

contract management for a range of contractual situations

privacy and confidentiality issues

probity principles and issues

whole-of-life considerations

equal employment opportunity, equity and diversity principles

financial and accounting issues relevant to the contract

public sector legislation including occupational health and safety and environment

legal aspects of negotiation

aspects of law of contracts, trade practices law and commercial law relevant to the management of contracts relating to complex procurement

Evidence Guide

The Evidence Guide specifies the evidence required to demonstrate achievement in the unit of competency as a whole. It must be read in conjunction with the Unit descriptor, Performance Criteria, the Range Statement and the Assessment Guidelines for the Public Sector Training Package.

Units to be assessed together 

Pre -requisite units  that must  be achieved prior  to this unit: Nil 

Co -requisite units  that must  be assessed with  this unit: Nil 

Co -assessed units  that may  be assessed with this unit to increase the efficiency and realism of the assessment process include, but are not limited to:

PSPETHC501B Promote the values and ethos of public service

PSPGOV505A Promote diversity

PSPGOV507A Undertake negotiations

PSPGOV508A Manage conflict

PSPGOV511A Provide leadership

PSPGOV512A Use complex workplace communication strategies

PSPLEGN501B Promote compliance with legislation in the public sector

PSPPROC501A Manage contract risk

PSPPROC502A Establish contract management arrangements

PSPPROC504A Finalise contracts

Overview of evidence requirements 

In addition to integrated demonstration of the elements and their related performance criteria, look for evidence that confirms:

the knowledge requirements of this unit

the skill requirements of this unit

application of the Employability Skills as they relate to this unit (see Employability Summaries in Qualifications Framework)

management of contract performance in a range of (3 or more) contexts (or occasions, over time)

Resources required to carry out assessment 

These resources include:

legislation, policy, procedures and protocols relating to contract management

case studies and workplace scenarios to capture the range of contract management situations likely to be encountered

Where and how to assess evidence 

Valid assessment of this unit requires:

a workplace environment or one that closely resembles normal work practice and replicates the range of conditions likely to be encountered when managing contract performance, including coping with difficulties, irregularities and breakdowns in routine

management of contract performance in a range of (3 or more) contexts (or occasions, over time)

Assessment methods should reflect workplace demands, such as literacy, and the needs of particular groups, such as:

people with disabilities

people from culturally and linguistically diverse backgrounds

Aboriginal and Torres Strait Islander people


young people

older people

people in rural and remote locations

Assessment methods suitable for valid and reliable assessment of this competency may include, but are not limited to, a combination of 2 or more of:

case studies




authenticated evidence from the workplace and/or training courses

For consistency of assessment 

Evidence must be gathered over time in a range of contexts to ensure the person can achieve the unit outcome and apply the competency in different situations or environments

Range Statement


The Range Statement provides information about the context in which the unit of competency is carried out. The variables cater for differences between States and Territories and the Commonwealth, and between organisations and workplaces. They allow for different work requirements, work practices and knowledge. The Range Statement also provides a focus for assessment. It relates to the unit as a whole. Text in italics  in the Performance Criteria is explained here.

Probity principles are 




management of conflicts of interest

maintained to:

ensure conformity to processes

facilitate accountability

ensure proponents are treated in a fair and equitable manner

encourage commercial competition, where appropriate

preserve public and private sector confidence in government processes

Legislation , policy and standards may include 

financial management legislation

government procurement/purchasing/contracting legislation, policy and guidelines

public sector standards

ethics standards

codes of conduct/ethics

cross-cultural and social justice issues

environmental purchasing

Formal and informal mechanisms may include 

non-confrontational interaction


formal contract variations

formal negotiations

Contract management plan may include 

risk management plan

contingency plan

communication/public relations plans

human resource management plan

disposal plan

contract review plan

setting up routines

checking quality assurance systems

transfer of legal responsibility


strategies to avoid implied acceptance of varied conditions through non-enforcement of contractual obligations

environmental/green issues

industry policy

Contracts may include 

memoranda of understanding/memoranda of agreement

in-house option directives

common use arrangements/standing offers

inter/intra-government agreements

letters of intent


purchases from suppliers

standing offers

Risks might include 

suppliers' inability to meet agreements

end users' or buyers' inability to meet obligations

limited number of suppliers

client considerations not fully understood

options for people with limited language/literacy skills

implications if dependence on one supplier is enshrined versus risks in lack of continuity and consistency in services provided

other environmental influences

Variation to agreements may include arise from 

change of scope

negotiation of new terms and conditions

dissolution of contracts

inability to deliver

Early signs of under -performance may be detected through 

tracking milestones

regular meetings

meeting records and follow-ups

file management - audit trail

stakeholder surveys on performance

ongoing review of deliverables

Actions to improve performance may include 

discussion with contractor

regular interaction

ongoing performance feedback

expert advice

Disputes may include 

disputes over:


delivery schedules

price changes

additional tasking

payment schedules

complaints from third parties

formal versus informal eg unethical versus criminal behaviour

Techniques available to resolve disputes include 





resort to contractual agreements

legal considerations

Negotiation of issues may include 

contract variations

continuous improvement




Actions  (as a result of unresolved conflict ) may include 


court action

termination of contract

Effective communication strategies may include 

clear communication

understanding the needs of the service provider and the client

setting regular times to talk, meet or check on progress

protocols for dealing with other stakeholders

emergency contact arrangements

a diary system to monitor milestones, timeframes, receipt of deliverables etc

strategies for ensuring information flow at critical stages of the contract

Organisational purposes may include 


governance requirements

relevant details extracted, collated and arranged in a format for reports and other documents

Unit Sector(s)

Competency field

Procurement&Contract Management

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