Supporting Contract Management Capability

14th February 2018

It seems that barely a week goes by at the moment without news of some large or critical supplier to government being in financial difficulty. The collapse of Carillion on 15th January has thrust the public sector supply chain firmly into the spotlight. Recent profit warnings issued by Capita and Interserve might previously have caused ripples in “The City” but are now becoming front page news.

Whilst the stories of central government contracts continuing to be awarded to Carillion throughout 2017 has raised some questions about the effectiveness of their procurement practice and due diligence, the hidden story in all of this is the lack of public sector capacity and capability devoted to Contract and Relationship Management.

The National Audit Office noted in its’ report “Improving Government Contract Management” back in September 2014 that “Contract management has carried low status and (there is) limited understanding of best practice and professional standards”. Subsequent global research published by the International Association of Commercial and Contract Management (IACCM) in 2015 discovered that, on average, 9% of contract value was lost during the delivery phase of contracts. So a supplier promises to charge you £100 and you end up paying £109 or alternatively you still pay just the £100 but you only get £91 worth of value.

The East of England LGA has long been an advocate of improving contract management capability in local government as a means of securing better value, given the shift over the last 10 years or so towards greater out-sourcing and the emergence of the so-called “Commissioning Council” model where local authorities procure third-party suppliers to deliver vital services on their behalf. Against this back-drop. we developed and delivered our first contract management courses in 2011 and they have continued to be popular ever since. Accredited by the IACCM and covering Basic, Intermediate and Advanced level, they can provide skills and knowledge enhancement for everyone from contract management novices to seasoned, experienced professionals.

Following a series of courses at Stevenage Borough Council over recent months, their Procurement Manager, Lisa Baldock commented that they were “very impressed with the course” adding that it has “given our staff a toolkit to understand contract management and where it can add value”.

In addition, we now have a Contract Management Challenge process available which reviews organisational capability and provides a clear framework for achieving and measuring improvement. You can find out more about the Challenge process on our web-site at: http://www.eelga.gov.uk/showcase/brentwood-borough-council-the-commercial-contrac
With the increased need to manage risk and protect value in local government contracts, there has surely never been a better time to invest in Contract and Relationship Management capability.

To find out more or for an informal discussion about how we can help you, please contract our Senior Manager, Eddie Gibson, on 01284 758310 or e-mail eddie.gibson@eelga.gov.uk

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