Unit of competency details

PSPPROC602B - Direct the management of contracts (Release 1)


Usage recommendation:
Supersedes and is equivalent to PSPPROC602A - Direct the management of contracts 17/Apr/2008
Is superseded by PSPPROC607A - Manage strategic contractsNew unit based on PSPPROC602B 04/May/2009

ReleaseRelease date
1 1 (this release) 18/Apr/2008

Training packages that include this unit

Qualifications that include this unit

CodeSort Table listing Qualifications that include this unit by the Code columnTitleSort Table listing Qualifications that include this unit by the Title columnUsage RecommendationRelease
BSB60110 - Advanced Diploma of AdvertisingAdvanced Diploma of AdvertisingSuperseded1-2 
CSC60107 - Advanced Diploma of Correctional ManagementAdvanced Diploma of Correctional ManagementSuperseded
CUS60309 - Advanced Diploma of Music BusinessAdvanced Diploma of Music BusinessSuperseded1-2 
CUV60311 - Advanced Diploma of Creative Product DevelopmentAdvanced Diploma of Creative Product DevelopmentSuperseded
CHC52310 - Diploma of Community Services (Development and/or Humanitarian Assistance)Diploma of Community Services (Development and/or Humanitarian Assistance)Superseded
BSB60407 - Advanced Diploma of ManagementAdvanced Diploma of ManagementSuperseded1-2 
BSB60507 - Advanced Diploma of MarketingAdvanced Diploma of MarketingSuperseded1-2 
BSB60807 - Advanced Diploma of RecordkeepingAdvanced Diploma of RecordkeepingSuperseded1-2 
BSB60907 - Advanced Diploma of Management (Human Resources)Advanced Diploma of Management (Human Resources)Superseded1-2 
CUV60307 - Advanced Diploma of Creative Product DevelopmentAdvanced Diploma of Creative Product DevelopmentSuperseded
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SchemeCodeClassification value
ASCED Module/Unit of Competency Field of Education Identifier 090901 Business And Commercial Law  

Classification history

SchemeCodeClassification valueStart dateEnd date
ASCED Module/Unit of Competency Field of Education Identifier 090901 Business And Commercial Law  05/Jul/2004 
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Modification History

Unit Descriptor

This unit covers management of contracts for strategic purchases to effectively minimise risks and achieve value for money to meet an organisations core objectives. It includes managing contract establishment, performance and evaluation.

In practice, directing the management of contracts may overlap with other public sector generalist and specialist work activities such as acting ethically, applying government systems, managing resources, managing client services, managing risk, etc.

This unit replaces and is equivalent to PSPPROC602A Direct the management of contracts.

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 contract establishment 


The requirements of contracts and strategic initiatives  are discussed, clarified, and agreed by all parties


Responsibilities for establishing and carrying out procedures are assigned to achieve contract outcomes


Effective communication strategies and processes are established and implemented to assist ongoing communication between stakeholders  and contractors


Relationship management is undertaken at all levels of personnel involved in procurement and contract management


Strategic relationships are established and managed to improve procurement capability and performance


Risk management plans are updated in accordance with organisational policy and procedures


Manage contract performance  


Progress of contracts is monitored  against set targets and performance measures to ensure success of procurement activities


Should monitoring find that set targets and performance measures are not being met, action is taken to rectify performance in a timely manner


Advice and support are provided to solve problems, make improvements and maintain progress


Opportunities to improve procurement outcomes are sought and negotiated with contractors


Approvals are provided/gained for contract variations  negotiated and agreed between the parties


Opportunities are provided for stakeholders and contractors to have input into and receive feedback on progress during the performance contracts


Manage contract evaluation  


Evaluation of contract performance is undertaken relative to planned performance measures and in consultation with stakeholders and contractors


Where stakeholders and contractors do not agree, dispute resolution is undertaken in accordance with organisational policy and procedures


Conclusions are detailed against agreed criteria to provide a complete picture of performance of contractors , the organisation's procurement processes  and value for money 


The performance of strategic initiatives is measured relative to planned outcomes in consultation with industry and other stakeholders


Lessons learnt from evaluations of contracts and strategic initiatives are documented in accordance with organisational requirements and used to continuously improve future procurement activities


Contractors and stakeholders are advised of evaluation outcomes in a timely manner in accordance with organisational guidelines

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:

managing strategic relationships

reading and applying complex, formal documents such as contracts, legislation and guidelines and applying them to contract management and industry development

networking with diverse clients, contractors and end users

responding to diversity, including gender and disability

problem solving, including conceptual and reasoning skills

undertaking research and analysis

managing financial and other resources

measuring the performance of strategic initiatives

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

aspects of law of contract, trade practices law, commercial law relating to contract management

probity principles and issues

government procurement environment

legal requirements of government contracting

financial rules and regulation requirements

implications of particular contracting arrangements

whole-of-life considerations

procurement management processes

equal employment opportunity, equity and diversity principles

cultural issues relating to contract management and industry development

relationship management at all different levels of personnel

public sector legislation including occupational health and safety and environment

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:

PSPETHC601B Maintain and enhance confidence in public service

PSPLEGN601B Manage compliance with legislation in the public sector

PSPGOV601B Apply government systems

PSPMNGT602B Manage resources

PSPMNGT604B Manage change

PSPMNGT606B Manage quality client service

PSPMNGT608B Manage risk

PSPPROC604A Plan for strategic procurement

PSPPROC605A Coordinate strategic procurement

PSPPROC606A Negotiate strategic procurement

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)

direction of contract management in a range of (3 or more) contexts (or occasions, over time) including 1 non-traditional procurement/finance activity such as a strategic initiative for industry development

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 situations likely to be encountered when directing the management of contracts

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 directing the management of contracts, including coping with difficulties, irregularities and breakdowns in routine

direction of contract management in a range of (3 or more) contexts (or occasions, over time) including 1 non-traditional procurement/finance activity such as a strategic initiative for industry development

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.

Contracts and strategic initiatives may include 

non-traditional procurement/finance activities

strategic procurement activities such as industry development

in-house option directives

inter/intra-government agreements

memoranda of understanding/memoranda of agreement

public private partnerships

purchases from suppliers

Stakeholders may include 

end users



potential providers/suppliers

current providers/suppliers

technical or functional experts or advisers

Federal, State/Territory and/or Local Government

the organisation

other public sector organisations


unions or staff associations

industry bodies

local communities and society as a whole

lobby groups, special user groups

Monitoring may involve 

progress meetings

visits to the contractor's premises

provision of samples

regular progress reports from the contractor

independent audit

end user feedback

Contract variation may include 

modification of:


performance measures

procurement plans


monitoring and evaluation processes

Evaluation of contractor performance may include 

strengths and weaknesses

client acceptance of service delivery (client satisfaction)

achievements in meeting delivery and completion dates

compliance with other contractual requirements

performance in relation to relevant policy objectives such as industry development, care for the environment, occupational health and safety, and affirmative action

achievement of the contractor in developing Australian and New Zealand supply networks

general relationships including effectiveness of communication at all levels

performance of key technical personnel

acceptability and cost of whole-of-life technical support including lead times and availability of spares and maintenance services

achievements in innovation and quality improvement programs

acceptability and suitability for future agreements including potential status as an approved contractor

Evaluation of the organisation's procurement processes may focus on 

effectiveness of project management including the project plan and the responsibilities and accountabilities set out in it

quality of the business case, as indicated by the achievement of planned outcome and the contribution to program objectives

effectiveness of contractor qualification processes

value obtained in bid clarification and post-tender negotiation

effectiveness of project management systems, focusing particularly on management information

effectiveness of risk management

methods for controlling variations in cost, time, quality and performance from the initial planning to completion

adequacy of safeguards against fraud, error and impropriety

incidence of material losses due to waste or inefficiency

overall performance in terms of cost, time, service and quality

Value for money must reflect 

whole-of-life program benefits

residual values

costs of parts

servicing and maintenance

industry benchmarks

Unit Sector(s)

Competency field

Procurement&Contract Management