The Role Of Procurement Contract Management In The Effectiveness Of Project Management For Ethiopian Electric Power: The Case Of Addis North Substation Rehabilitation And Upgrading Project
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Date
2018-06-07
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Addis Ababa University
Abstract
In today’s competitive and hectic global economy effective contract management is paramount for effectiveness of project management to guarantees organization in realizing its business value by successful delivering projects on time and within budget. The aim of this study is to assess the role of procurement contract management in affecting the effectiveness of project management at Addis North Substation Rehabilitation and Upgrading Project. Research was executed by means of questionnaires and interviews where employees from Procurement, Logistics and Warehousing Department, Substation operation staffs, and Project office staffs were invited to share their experiences of the same. The Literature acknowledges the importance of contract management for effective Project management by citing important terms and conditions for good contracts. They also spell out the basis for supplier selection, remedies for breach of project contracts, service level agreements, contract as a project risks management tool as well as supplier relationship matrix. This research has discovered that there is a very high dependency of effective project management on suppliers’ compliance with terms and conditions, suppliers’ technical capability and close monitoring of suppliers during project implementation. Therefore, contract management is essential for effective project management. The researcher recommends Ethiopian Electric Power to recruit more experienced and qualified staff for its contract management function, to have e-contract management solution in order to have visibility of its active contracts at every stage of the project lifecycle, to have strong technical supplier evaluation and to secure and enforce penalty clauses for suppliers’ breach of project contracts. This is because Ethiopian Electric Power improves its ability to manage its project contracts at practically every stage of project life-cycle, the more it can transform contracting into a project management competency.
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Supplier’s technical capabilities, Procurement contract management, effective project Management, supplier’s compliance and Key Performance Indicator