When done well, contract management can add real value.
Benefits of good contract management include no surprises or escalating costs, more efficient processes, easier change management, consistent processes and the ability to build stronger relationships with suppliers. The three main high-level stages of contract management cover: mobilisation (at the beginning), implementation (over the lifetime of the contract) and exit (towards the end).
Every contract needs a contract manager.
The contract manager should be clear about what their responsibilities are on each contract. Contract managers should take every opportunity to gather feedback, which can be provided in many ways and doesn’t have to be formal. Make the most of face to face meetings and online communities to get better feedback; the better insights you have, the better your contracts and future procurements will be.
You should try to keep contract variations and extensions to a minimum.
Variations and extensions are exceptional and should be kept to a minimum. They should only take place where the changes that you make would not significantly alter the original contract. If you need to vary your contract requirements and/or extend the length of the original contract, you may need to undertake a new procurement exercise.
You can capture lessons learned at any stage of the procurement journey.
Capturing lessons learned early, often and throughout the procurement journey supports continuous improvement. Asking the right questions leads to better feedback: "What worked well?", "What didn’t work well?" and "What would you do differently in the future?".
Exit should be planned for and proactively managed from the outset.
The complexity of individual contracts should define a proportionate period during which the exit plan will be enacted. Exit plans typically include considerations for service continuity, data security and privacy, knowledge and document transfer, people and costs. These plans should be reviewed periodically or when significant change occurs.
5 things to know
What to think about first
This stage of the procurement journey will typically include:
- Managing and monitoring contracts and supplier relationships;
- Receiving and paying for goods and services;
- Modifying contracts (if necessary); and
- Closing and exiting contracts.
Having now awarded your contract at the end of the ‘Procure’ stage, you’ll now be focusing on:
- Delivering improved social, cultural, environmental and economic well-being impacts;
- Working constructively and collaboratively with your supplier partners; and
- Progressively re-engaging with the ‘Plan’ stage and its associated activities.
CIPS Procurement and Supply Cycle
The ‘Procurement and Supply Cycle’ developed by the Chartered Institute of Procurement and Supply (CIPS) includes 13 steps to guide you through the procurement process for goods and services.
You will have already completed activities that are consistent with steps 1 – 9 during the ‘Plan’, ‘Define’ and ‘Procure’ stages of the procurement journey.
The following steps from the CIPS ‘Procurement and Supply Cycle’ relate most closely to the ‘Manage’ stage of the procurement journey:
- Warehouse, Logistics and Receipt;
- Contract Performance and Improvement;
- Supplier Relationship Management; and
- Asset Management.
You’re now in a new relationship with your chosen supplier partner. Make each day count towards achieving the seven wellbeing goals, using the five ways of working
Throughout the life of managing public contracts, it’s crucial to proactively monitor and evaluate performance and progress towards achieving a more equal, more sustainable and more prosperous Wales, fulfilling the legal obligation to improve social, cultural, environmental and economic well-being. This starts with the mobilisation stage and carries on through implementation, right up until contract exit.
This will help to:
- Achieve the Welsh Government’s Net Zero target by 2030;
- Support a green recovery;
- Drive greater social value through more consistent delivery of more well-being impacts; and
- Contribute to the shared ambition for a Wales of Fair Work.
Success in achieving these goals, regardless of contract value, is enhanced by maintaining constructive, collaborative, and proactive relationships with supplier partners throughout the contract duration.
Document stories of change – incremental achievements and lessons learned on the path towards achieving the contract’s goals – rather than waiting until the contract’s end to create a case study (though this is also recommended).