17 Government needs to put in place the systems and processes to enable the effective oversight and management of contracts. A common understanding of the structures and systems is emerging from the current reforms under way within departments. In particular:
• Governance
Departments are improving their governance of operational contracts. Departments are appointing senior champions for contract management; clarifying senior responsible owners and lines of escalation; and having a senior forum to challenge, scrutinise and oversee working contracts and liaise with strategic suppliers.
• Basic contract information
Departments do not have information systems that combine the needs of finance (paying contractors), procurement (planning for and conducting bidding), or contract management (understanding performance, costs, the commercial position and the agreed contract). A few larger departments are still putting in place contract registers. We have yet to see a system that shows departments their current contracts including all changes and contractor communications. The Cabinet Office is setting up a common set of data requirements for government contracts. It will re-launch the Contracts Finder database by October 2014, which is designed to meet procurement needs. It also intends to provide a contractor relationship management system for the new CCS by the end of 2014. However, this plan is undeveloped.
• Integrated structures
Departments are taking different approaches to integrating contract management within the business. Some are building end-to-end commercial teams that follow the contract through its life. Others are building specialist commercial teams to focus on each project stage. Some departments are also clarifying how the commercial and operational teams will manage the contract.
• Integrated processes
Contract management needs to be integrated into the commissioning process. This means designing policies and contracts with a view to the contract management capability available and any flexibility required. The Cabinet Office has updated its guideline standard operating procedures to ensure contract management is mobilised earlier.