Contracting activity in many entities represents an important business activity, often involving a significant level of expenditure and the utilisation of substantial in-house resources. As a result, inadequate contract management practices will have a direct adverse impact on an agency's capacity to meet its business objectives.

Better practice entities incorporate reporting on contracting activity into their regular management reporting arrangements. This should involve the development of a number of contracting performance measures and the periodic measurement and reporting against them as an integral part of the entity's management reporting regime. This will assist in reinforcing the importance of good contracting practices and also provide assurance to senior management on the agency's performance in this area, including its compliance with policy and reporting requirements.

Examples of performance measures include:

•  establishing benchmarks on targets for key steps in the procurement cycle such as the lead time from the date of a procurement request to the signing of a contract

•  the number and percentage of procurements in excess of the relevant threshold that have not been undertaken through open tender

•  instances where the agency has departed from the Commonwealth Procurement Guidelines, and

•  the number and percentage of procurements that have used panel arrangements or standing offers. Such an analysis can highlight the benefit of establishing such arrangements and the extent of use of existing arrangements.

Better practice entities incorporate reporting on contracting activity into their regular management reporting arrangements.