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Manage the Contract, Manage the Contractor

Wednesday November 13th, 2013

The National Audit Office has just published two reports, The Role of Major Contractors in the Delivery of Public Services and Managing Government Suppliers.

Interestingly these focus on the role of the contractor and cover three key themes:

Managing the relationship with strategic suppliers – Is there sufficient competition in contracted-out public services? What is government doing to manage its suppliers more effectively?

Getting value for money from contractors – Can we see whether contractors’ profits reflect a fair return? Is government securing value from its strategic suppliers?

Managing contractors’ performance – How can we know whether contractors are delivering? Does government have an overall view of supplier performance?

Eddie Regan

Eddie Regan

Do you get the theme yet?

Once again, it is clear that the lack of cohesive contract management processes and practices across the public sector is preventing many contracting authorities from getting best results from their contracts.

Let’s think about the NAO points.

Managing the relationship with strategic suppliers – Why only ‘strategic’ suppliers? Authorities need to develop working relationships with all suppliers and start to open up more. Too many authorities play their cards too close to their chest, thereby creating a ‘them and us’ relationship, which doesn’t make for quick and easy resolution of problems.

Getting value for money from contractors – From a contractor’s point of view, it would help if contracting authorities offered some indication of what they expect in terms of VfM. The term is too widely used, with no coherent explanation of the expected outcomes, often because the buyer doesn’t know what they expect, or, indeed, how to score such VfM in their evaluation process. Similarly, many have no understanding of how to encourage contractors to improve their contract delivery, or how to encapsulate such change in the contract itself.

Managing contractors’ performance – Too many contracts are placed and the contractors are then left to their own devices. End users are frequently unaware of the escalation process for identifying problems, leading to frustration as no improvements are forthcoming. This can lead to grave dissatisfaction with the contractor, when a simple chat could have resolved the problems early on.

The introduction of contract management processes across an organisation can help to resolve a number of these issues.

Regular meetings can help to formulate good working relationships and allow trust to develop between the authority and the contractor.

Dialogue between both parties, to discuss ways in which to improve contract delivery and/or outcomes, can often be hugely beneficial to the authority, the contractor and, more importantly, the end user.

Clear, detailed procedures to deal with any issues that arise, on both sides, can smooth problems quickly and ensure that the contract delivers the expected outcomes.

No one is pretending that everything can be resolved immediately by introducing contract management processes, but the continued failure to implement such practices will do nothing to resolve the issues raised by the NAO reports.

 

Eddie Regan (Senior PASS Consultant)

Twitter: @Eddie_Regan

 

Gov Opps training partner, PASS (Procurement Advice Support Service) runs relevant training courses on public and private sector procurement. To get more info on the courses, and all other PASS courses, click the links below:

http://www.passprocurement.com/events/private-events/preparing-perfect-tenders/

http://www.passprocurement.com/events/public-events/eu-directives/

All PASS Events

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