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HOW TO CONSTRUCT AContractComplianceMatrixA solid matrix goes a long way, identifying gaps or errors in the contract document,providing a baseline for measuring performance as it progresses, and servingas a clear roadmap during the close-out phase.B Y TO M R E I DA contract compliance matrix, whichprovides a simplified overview of everycontract requirement, is a tool developedby the contract administrator. Whilea variety of formats and headers canbe used, typically matrices fall intothree broad categories.The first category is simple—itidentifies the clause titles and providesa brief synopsis of the contents.The second category provides someAbout the AuthorTOM REID, CPCM, FELLOW, is chiefproblem solver for Certified ContractingSolutions, LLC, in Denver, Colorado.He is a member of the Denver Chapterand presently serves as the nationalvice president-elect for the South CentralRegion. Send comments on this articleto cm@ncmahq.org.40 Contract Management / January 2004what more detail, breaking down theclause listing into finer granularity(for example, specifying the contentsof section 6.B [7][ii]), by adding moreheadings—such as whether a deliverable is required under the clause andif so, who is responsible—or by doingsome of both.The third category and most complexcompliance matrices evolve intofull-blown contracts and programmanagement plans. Usually createdonly in electronic format, these matricesuse a large number of headings, including due dates, reference documents,points-of-contact, responsibilities,authorities, and correspondence control references. The contract clausesare listed in detail, and the entirestatement of work, as well as all referenced documents, are included. InWeb-based environments, each ofthese entries can be hot-linked tosource documents.Contract compliance matrices aredynamic. They reflect the status of acontract only at a single point in time.Each modification to the contractrequires modification to the matrix.Each event in a program plan, such asthe completion of a deliverable, mustbe noted under the appropriate heading.The more complex the matrix, the moremaintenance it will require. Thus, everycompliance matrix task must be scaledto the user’s needs. There is not aone-size-fits-all mentality to thisprocess. Only headings that are helpfulto the end-user should be applied—no more and no less. While it savestime and expense to plan the headingsout in advance, modern word processingtools allow you to add rows and columnsin such a table with relative ease.

The “Real-World” ContextA contract compliance matrix servesmany practical purposes. It might beused only by the contracts departmentas a tool to understand the contract,track events in the contract, or trainnew contract administrators. As astand-alone, the matrix can be a usefulresource to help explain contract sections or components to managementor to a customer. It can also be valuable at contract close-out time, as achecklist and tracking tool.More often, however, the creationof a contract compliance matrix is thefirst step toward a contract managementplan. Using the matrix to establish thevarious contract requirements allowsyou to offer input to the programmanager on those portions of hisresponsibilities that must be fulfilledunder the contract. This presents thebaseline for discussions on whospecifically will track the fulfillmentof those requirements. Once thoseissues are settled, you can develop acomplete contract management planfor inclusion in the master programmanagement plan. From these documents the customer will generallydevelop a contractor surveillanceplan, specifying details on contractoversight and performance measurement. It all starts here.Ideally, the contract complianceactivity starts when the request forproposal (RFP) is received, and arequirements traceability matrix (RTM)is developed to ensure that all RFPrequirements are being addressed.While there are significant similaritiesbetween a RTM and a contract compliance matrix, they are fundamentallydifferent. The RTM is set against a relatively fixed document with a verylimited life span. “Performance” underthe proposal is straightforward—respond to the RFP.The contract compliance matrixwill most likely become far moredynamic, and the amount of information necessary to be a fully functionaltool for contract management can farexceed the data necessary in an RTM.Still, a quality RTM is an excellentstarting point to create a contractcompliance matrix. Most commonly,however, no RTM exists, and the contract compliance matrix must be createdfrom “whole cloth,” so to speak.The ProcessThe starting point is always the contract.The contract must be gathered in asingle location and read from beginningto end. Every modification should begathered into the contract file as well.This same approach applies to both thehard- and soft-copy contract formats.It will often be necessary to gather thereference documents into the samefile location. Only with a fundamentalgrasp of the nature and complexity ofthe entire contract can you begin todevelop a matrix.The next step is to determine youraudience and what data each stakeholder needs. Compliance matricescan serve a multitude of purposes. Thatis why there is considerable choice inwhat headings you use. In an idealsetting, you would create the matrixusing all possible headings in asearchable database format. Then,January 2004 / Contract Management 41

H O WT OC O N S T R U C TTen Steps to Createa Contract ComplianceMatrix(1) Read the contract.(2) Determine the audienceto establish the appropriateheadings and format.(3) Determine the correctlevel of detail.(4) Enter the data.(5) Capture data for variableheaders and flow-downrequirements.(6) Review contractmodifications.AC O N T R A C TC O M P L I A N C E(8) Actual delivery date;page breaks. This is not an area inwhich to be dogmatic, however—stayin the familiar, comfortable format-zonethat works best for you.Divide sections of the contract inthe matrix with some identifiable,visual break. A shaded block works well.Set up each section of the contractunder a separate heading. Make thefinal document, whether printed oron-screen, as user-friendly as possible.Your next step is to determine thecorrect level of detail for each entryin the table. For a simple matrix, youwill probably only want to include theprime contract document, and forthe specifications you might only say,“Identifies the work requirementsunder the contract.”For more complex matrices andspecific user-tailored needs, it may beappropriate to break out each sectionof the statement of work. Most contractswill incorporate other documents byreference that will be applicable to thecontract in one way or another. Forcompleteness, some or all of these mayneed to be fully analyzed and therequirements contained in them spelledout in the matrix. The key is to makesure you have tailored the complexityof the matrix to the needs of the user.If you make the matrix too simple or toocomplex, the document will be useless.(9) Applicability timeframe;The Programsure that a matrix—of any sort—isdeveloped. If the client is only comfortable with a simple matrix, preparethat. As noted earlier, columns androws can be added later.Headers come in two basic flavors.“Fixed headers” are those that willappear in all matrices. Typically, thosewill be the headings such as “clausenumber,” “clause name,” and “contents”or “description.” These headers areapplicable to the simplest of matrices.For more complex versions, anynumber of “variable headers” can beused. These come in as many variationsas you and your client can imagine.Popular additional headers include:(1) Deliverables;(2) Responsible organization/person;(7) Add disclaimers.(8) Proofread, proofread,proofread.(9) Distribute for commentbefore going “final.”(10) Keep the matrix current.(3) Referenced documents;(4) Documents incorporatedby reference;(5) Customer point-of-contact;(6) Due date;you would selectively print versionscontaining only the headings necessary for a particular application. Forexample, a matrix might be useful fortracking the funding modifications.But, there could also be reasons whyyou would not want the funding information to be widely disseminated.While the data could reside in thematrix, you would only print thatcolumn of data on those versionsbeing distributed to those who needto know this kind of information.Next, you will want to establish thematrix headings. Detailed interviewsshould be held with the client to understand their needs and their interests.If they have never used a matrix andfound what a functional tool it can be,you may have to share some examples.Do not undersell the need for continuedmaintenance, but do not oversell theneed for complexity in a simple contract. The scope must be sized to youruser’s specific needs. At this stage, themore important aspect is to make42 Contract Management / January 2004M A T R I X(7) Reporting date;(10) Correspondence controlreference number;(11) Links to other databases; and(12) Required format for eachdeliverable.Next, format the document in whatever software you are using. While thetemptation is to use a spreadsheet,experience has shown that usingtables in a word processing programworks best. For one thing, you willhave a lot of words, and most spreadsheet programs do not do spell-checkautomatically. Also, tables usuallyprovide you with greater flexibility inmore readable cell sizes and formattedNow, it is time to enter the data. In aworst-case scenario, you may have totype it all in longhand. If so, be sureto have a separate set of eyes proofread your data entry. If you haveaccess to a soft copy of the contract,you will be able to cut and paste thesections where they belong.Be careful—a matrix is useless if allit does is take the entire contents ofa contract and format it in columns.The “contents” or “description” section needs to be a readable synopsisof the contract, not all of the legalese.Remember: Your user is most likely abusiness executive or a program manager. They expect you to know whatthe contract says in detail. All theyneed is a brief description to understand the thrust of a clause. Even for