2.5 The successful delivery of long term projects depends heavily on effective contract management. The NAO and the PAC have identified a number of programmes and projects where poor contract management has adversely impacted on value for money.5 For example, our 2008 report on managing service contracts found that central government organisations do not always allocate appropriate skills and resources to the management of their service contracts.6 Our 2007 report Making changes in PFI operational projects highlighted that value for money was often put at risk by insufficient attention to the negotiations for contract variations.7
2.6 In our survey of commercial directors, 13 out of 16 identified contract management as an area where commercial skills needed to be improved. PCRs found a shortfall in contract management skills in nine out of 16 departments.
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5 See The Warm Front Scheme, NAO (HC 126, 2008-9) and PFI: The STEPS deal, NAO (HC 530, 2003-4). For other examples, see Appendix 2, www.nao.org.uk/commercialskills09_examples.
6 Central government's management of service contracts, NAO (HC 65, 2008-9).
7 Making Changes in Operational PFI Projects, NAO (HC 205, 2007-8).