This interactive publication draws on our audits of government contracts and engagement with government to provide practitioners with insights on the new, emerging higher standard for government contracting.
What is this?
In this publication we set out our insights on some of the areas where contracts go wrong, the warning signs that we look for, and the examples of emerging good practice we have seen across government. We draw on many of our previous reports, our engagement with government as it has sought to improve its commercial capability, and our discussions with practitioners about the challenges they face. We also set out our framework for auditing commercial relationships which we intend to increasingly use to explore emerging good practice. The specific questions we ask will vary for each audit.
Why have we produced this?
The public sector now buys more in than it spends on delivering services itself. It is also buying increasingly complex things in increasingly complex ways. Public sector requirements, such as transparency, fairness and achieving value beyond the core contract terms, make this harder.
Contracting scandals in 2013 served as a wake-up call to government. It realised that it had consistently underinvested in its commercial capability and the management of its contracts. While contractors' behaviour has sometimes been reprehensible, government should not have allowed contractors to behave in this way.
As government has reacted to these scandals, it has also come to appreciate the need to improve its commercial capability and the value of managing its contracts properly.
In 2013, government turned to our good practice framework for contract management, originally published in 2008, to assess its management of contracts. We developed this framework with government through workshops with practitioners. We believe it still stands as a practical guide to the functions that government must carry out for operational contracts. But having seen it used over the past few years, we believe that although necessary, the framework is not sufficient; government needs to develop a much higher standard if it is to achieve its contracting goals consistently.
In striving to improve, government departments have thus found themselves inventing 'good practice', rather than looking to implement an existing model. Our assessment is that things are improving, but still far from perfect. We want to challenge government to establish and meet a much higher standard so it can achieve its contracting goals. At the same time, our new audit framework for commercial relationships aims to provide some consistency in the way we view contracts so that we can enhance our understanding of what is 'good practice' just as government raises its standards.
Who is it for?
We have aimed our Commercial and contract management - insights and emerging best practice at public sector leaders responsible for commercial relationships and contracts, and those practitioners managing contracts, both in the commercial function and more broadly.
How should it be used?
We cover 7 areas of our commercial relationships framework and highlight some of the issues we have found for each area. These show what we think are the most important areas for government to think about and are not an exhaustive checklist or comprehensive guidance on how to procure and manage contracts. Our thoughts on emerging best practice provide ideas of what might help, as government continues its journey to work out how to best contract for what it needs and set the high standards needed. Revised commercial standards published in October 2016 are a positive step on this journey - government now needs to ensure these standards are implemented and continue to raise its expectations.
Readers may choose to read this document as a whole, or go straight to our list of the 20 important insights for government to think about.