3.6.2  Public sector risk mitigation mechanisms

Public Sector risk mitigation/management strategies include:

•  research before issuing tenders

•  best practice tender and evaluation processes

•  reducing scope for agencies to assume risk unintentionally

•  developing a contingency plan in case of default

•  structuring payments with milestones so that there is minimal financial loss with default or poor performance

•  insurance as appropriate

•  best practice control monitoring and management (discussed in chapter 3.7)

•  recognition that value for money does not necessarily mean "lowest cost".