Contract Preparation, Negotiation, and Execution

3. 1 Scope

This section discusses the processes and procedures to be followed in the preparation, negotiation, and execution of contracts covering PIDS-financed research projects.

3.2 Objectives

The processes and procedures described in this section are designed to facilitate the preparation of research contracts for Institute-supported projects and expedite the initiation of research activities. It aims to ensure that the contracts that are drawn reflect fully the needs and requirements of the research proponent to carry out the proposed research. At the same time, it also seeks to ensure that the Institute's expectations with respect to the types, quality, and timeliness of delivery of outputs to be are adequately prescribed by the contract.

3.3 Processes and procedures

3.3.1 Preparation of RSD inputs to the contract

Following the approval of the research proposal discussed in Section 2.0, the Research Services Department (RSD) shall immediately start the process of contract preparation. The RSD will send an Initiating Memorandum to the Administrative and Finance Department (AFD) requesting that a contract be drawn between the Institute and the proponent. The Memorandum shall be accompanied by the following documents which will serve as inputs into the contract:

• Draft project description. This narrative provides a brief description of the proposed research which will be used in the contract section entitled "The Project." It will contain a discussion of the a) objectives of the study (or project); major activities to be carried out; and the expected outputs of the project.
• Approved research proposal. The proposal provides an amplified description of the project and will become an integral part of the contract as an attachment.
• List of milestones or performance indicators. The list will enumerate the objectively verifiable indicators through which the progress or non-progress of project implementation can be gauged. The list will be an attachment to the contract and will be referenced by the section entitled "Progress Reports."

The section, "Progress Reports," will be revised to require the submission of the following reports and forms prior to each release of project funds: a) a short narrative which discusses the activities carried out and accomplishments made during the reporting period; b) PIDS Form No. RSD-1 which compares in summary fashion expected and actual outputs during the period; c) PIDS Form No. RSD-2 which presents the problems encountered during the reporting period and remedial actions taken (or proposed to be taken); d) PIDS Form No.RSD-3 which shows the work plan for the next reporting period including expected outputs; and d) copies of actual outputs for the period.

3.3.2 Preparation of the research contract

Upon receipt of the Initiating Memorandum, the AFD shall draft the research contract. The preparation of the contracts shall conform to PIDS guidelines (to be developed and documented by AFD). The draft document shall follow the approved contract format and will contain the standard contract terms and conditions. Appropriate provisions will prepared on project description, progress and final reports, schedule of releases, etc. based on the inputs discussed above.

3.3.3 Review of the draft contract

A copy of the draft contract will be send to RSD for review and comment. The review shall help ensure that the technical specifications of the project, monitoring systems and instruments, and reporting requirements are adequately incorporated into the draft contract.

After reviewing the contract, the RSD will return it to AFD for revision (if necessary) and negotiation with the proponent. The Director for RSD indicates his clearance on the contract by affixing his initials. If revisions are warranted, the necessary changes will be discussed in the forwarding memorandum to AFD.

3.3.4 Revision of the draft contract

The AFD will, if indicated by RSD, revise the contracts. The revision will be undertaken on the basis of the comments and revisions described in the forwarding memorandum.

3.3.5 Contract negotiation

The AFD will formally transmit a copy of the draft contract to the proponent for their consideration and signature. If the proponent finds the contract acceptable, he/she affixes his signature and returns it to AFD. If the proponent requests for a revision of the contract, he/she returns it to AFD with the proposed changes.

3.3.6 Contract revision

The AFD reviews the revisions to the contract requested by the proponent. If acceptable, the AFD revises the contract and returns it to the proponent for signature. If the proposed revision materially changes the design of the project, activities, expected outputs, reporting requirements, and timing, he forwards the revised contract to RSD for clearance.

If the AFD does not find the revisions requested by the proponent acceptable, he so informs the proponent. However, if the proposed revision materially relates to the design of the project, activities, expected outputs, reporting requirements, and timing, secures RSD clearance prior to notification of the proponent.

3.3.7 Review by RSD of proponent's suggested revisions

The RSD reviews the revisions to the contract requested by the proponent. If acceptable, the RSD clears on the revised contract and returns it to AFD for appropriate action. If the proposed changes are not acceptable, RSD returns the contract to AFD with an explanatory note.

3.3.8 Acceptance/non-acceptance of contract by proponent

If the proponent finds the contract acceptable, he/she signs the contract and returns it to AFD. If the proponent still finds the contract non-acceptable, he/she may return it to AFD for further revisions. The proponent may also request for a formal meeting with PIDS to thresh out differences. The AFD shall arrange the meeting and may request an RSD representative to attend the meeting.

3.3.9 Final execution of the contract

AFD sends the signed contract to the PIDS President for his countersignature. The President countersigns the contract after verifying the initials of AFD and RSD on the contract.

3.3.10 Recording of contracts

After the President signs the contract, the AFD records the contracts in its books. Copies of contract are provided to appropriate parties - the proponents, AFD files, RSD files, etc.

3.3.11 First release of project funds

If specified by the executed contract, the AFD causes the first release of project funds to the proponent.

Chart 3 outlines the procedures and processes described above.