contract management presentation by simon gresham
TRANSCRIPT
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Contract Management
Presentation bySimon Gresham
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About Me• 30 years working in contracting environment• Started in catering• Worked on first local authority compulsory
competitive tendering• Moved on to market testing of central government
services• Worked on major accommodation PFIs• Advisor to a range of clients and contractors• Now advise on small and large procurements mainly
covering facilities management• Live in Norfolk
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Contract Management Why?
“ Even the best outsourcing contract means nothing if its contents are forgotten, milestones are missed or obligations are not tracked or compliant to agreed service levels”
2012 report on global outsourcing
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Contract ManagementA Definition
“The management of contracts made with suppliers, customers, partners, or employees”
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Contract Management
“Contract management is the process of managing contract creation and execution for the purpose of maximising financial and operational performance and minimising risk”
Wikipedia
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Contract Administration
“ The processes and practices that underpin the contract management function – the monitoring of quality and cost, administration of the invoices, paperwork, purchase orders”
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Contract Management
How many of you actively manage your contracts?
What success stories do you have?
What disasters/nightmares have you had?
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Current Contracting Agenda?
• Drive for savings• Local services passed down to Town/Parish Councils• More outsourcing of non core/back office services to
save money• Debate – in house or private sector – which is best?
Are there alternatives?
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Current Local Authority Agenda?
• Joined up services• Linking with other Authorities• Joint Ventures• Greater use of the voluntary sector (The Big
Society?)• More resident involvement/views• More reporting – greater visibility and accountability
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Current Parish/Town Council Issues
• Standing orders being reviewed• Updates in contracting procedures• Difficulties finding contractors• Too many contractors?• Deciding who to invite – shortlisting• OJEU• TUPE• Specifications and documents• Evaluation of bids
Do you have any current issues?
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Contract Management Ground Rules
• Be clear about the process you are adopting• Be clear about Standing Orders and internal Council processes• Involve the right people in the Council• Examine the feasibility• Gather the user’s requirements so that you get want you
want• Make sure you get something back from the supplier that
shows they can deliver and for what price• Evaluate the proposals on a like for like basis• Manage the arrangement once you have agreed it
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The Overall Process
Before you go out to contract, seek quotations or tenders
Feasibilitystudy
CompetitionStrategy
ProjectPlan
What could we do?
How could we do it?
What is our plan?
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The Overall Process
Going out to contract, seeking quotations/tenders
Procurement Strategy
Specification or Brief
The Competition
*External Bids*In-house Bids
Evaluation
How do we go about it?
What do we want?
Let us see what is on offer?
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The Overall Process
After you have gone out to contract and selected a provider
The Client Side Contract Administration
Implementing the partnership
Are we set up to manage it?
Let us now manage it?
Let us see how well we did?
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The Project Plan
Determine Service
Requirements
ProduceSpecification/
Brief
Advertise theService/Supply
ReceiveExpressions ofInterest (PQQ)
ShortlistProviders
Issue Invitationto Tender/
Quote
Receive proposals
Evaluateproposals
Clarificationwith first
choice
Award theContract
Start theContract
Managethe
Contract
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Mobilisation Activities
• Staffing and communications (TUPE)• Recruitment and training• Pricing and payments• Contractual and relationship (reporting)• Assets and infrastructure• Implementation (may be over time rather than
immediately)
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Managing the Contract
What do you need to make it work?
• A clear specification• Sensible hand-over arrangements• Effective communications• Recognition of teething problems
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Managing the Contract
• Clairvoyant contractors do not exist• Ill informed clients tend to get annoyed• Avoid the ‘them’ and ‘us’ mentality• Be consistent• Avoid personality clashes• Develop the relationship
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Specifications
• Input versus Output• Can you ever achieve a totally output based
approach?• What do contractors think?• What are your ‘Imperatives’?• If you go for an output approach, do you
accept the risks?
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Contractor Monitoring
Onus on the Contractor to monitor their own performance
• Completion sheets• Handheld recording• Sign offs from the client/customer• Photographic proof• Response times• Rectification approach and timescales
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Client Monitoring
• Checks that contractor records are correct• Random sampling approach• Get customer feedback• Monitor complaints• Focus groups
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Reporting
• Monthly report• Report against KPIs• Client review meeting
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Example Report Contents
Quality
• Quality Audit scores• Remedial work• Response times• Periodic tasks• Customer complaints• Customer surveys
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Example Report ContentsWorkforce
• Attendance• Absence• Training• Recruitment• Staff turnover• Uniforms• ID and Vetting• Discipline/Grievance• Workforce surveys
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Example Report ContentsHealth, Safety and Environment
• Accidents/incidents• Safety audits• Risk assessments• Fire safety• Safety training• COSHH• Recycling• Environmental activities
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Example Report Contents
Management, Reporting and Administration
• Management information• Financial performance• Cost reduction• Invoicing• Contract variations
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Financial Management
• Depends on pricing mechanism– Lump sum – invoice for one twelfth per month– Unit prices – invoice against pricing schedule
• Need to reconcile against activity• Need to manage “overs” and “unders”• Payment tied to performance - defaults
mechanism
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Change
• Change control mechanism built into contract• Basis of pricing change• Business cases• Client led decision making• Mechanism and escalation process
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Failure
• Default mechanism in the contract– 3 strikes and you are out?– Match to Key Performance Indicators– Dialogue– Evidenced based– Escalation process
• Ability to earn back service credits
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Example KPIs (Grounds)KPI Area being measured KPI
1 Health and Safety Robust grounds maintenance safety systems are in place and are compliant with legislation and good industry practice
2 Health and Safety Staff equipped to carry out the tasks required including safety wear and safety systems and safe equipment
3 Health and Safety Managers hold valid advanced health and safety certificates
4 Health and Safety Staff hold valid standard health and safety certificates and equipment use certificates
5 Grounds Maintenance Service Equipment, materials and other resources required for the provision of the grounds maintenance services are provided in accordance with the Specification
6 Grounds Maintenance Service Grounds maintenance carried out at the times stated in the Specification as shown by the sign offs made by the grounds maintenance staff after completion
7 Grounds Maintenance Service Grounds maintenance carried out to the standards set in the Specification as shown by the sign offs made by the grounds maintenance staff after completion
8 Grounds Maintenance Service Reactive maintenance carried out in accordance with client requirements
9 Grounds Maintenance Service Equipment, materials and plants provided in accordance with the Specification
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Example KPIs (Grounds)KPI Area being measured KPI
10 Staff Staff are attired in appropriate uniforms
11 Staff Staff are CRB checked
12 Staff Staff training plan in place and training being carried out
13 Staff Staff training records are up to date at all times
14 Finance Financial records are maintained in accordance with the Specification
15 Reporting Client’s reports are submitted in accordance with the Specification
16 Customer Surveys Customer surveys are carried out six monthly and results are discussed with client
17 Grounds Maintenance Strategy Grounds Maintenance Strategy prepared and discussed with client annually
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Success
• Partnership principles• Balanced scorecard• Innovation• Gainshare• Social responsibility• Apprenticeships
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Successful Contract Management
“ Even the best outsourcing contract means nothing if its contents are forgotten, milestones are missed or obligations are not tracked or compliant to agreed service levels”
2012 report on global outsourcing
“ The aim must be to develop a partnership with your contractor which is mutually beneficial and long lasting”
Simon Gresham
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Contract Management
Clinic – Your Questions Answered?
For further information about Contract Management or Contracts and Tenders please feel free to contact Simon Gresham on [email protected] or 07798 623750