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What is it?

'Contract management' refers to the management of performance of suppliers through standardised processes such as contract administration, performance reviews and risk management. Below, is an overview of basic contract management techniques, and key signposts to sources of more detailed information.

As the diagram below shows, contract management refers to a set of techniques used to deliver the expected value defined within a contract.

Source: GCF, SSRM Guide, 2018

Why does it matter?

A number of boroughs indicated that they do not have a mature or consistent approach to contract management. When performed well it can enable better outcomes from procurements, particularly in technology contracts requiring customisation, implementation or capacity for innovation.

Who should do it?

Contract Managers Contract Managers are responsible for performing or co-ordinating the bulk of contract management functions, and should be aware of best practice.

Procurement Directors Procurement Directors ought to steer the contract management approach and take an active role in appraising its ability to deliver organisational outcomes.

CIOs / CDOs, & Procurement, Finance and Legal teams CIOs / CDOs ought to contribute to the diligence of a technical supplier and in agreeing desired outcomes sought from a technology supplier. Procurement, finance and legal colleagues should be consulted on and provide approval for any contractual decisions which inform the tendering process.

Project Teams Project Teams (e.g. SRO, Business Analyst, Data Protection Officer) ought to be made aware of typical contract management procedures to ensure that they follow any protocols when engaging with suppliers.

How should you do it?

If you would like to strengthen your contract management capabilities, there are a number of references available online. For public bodies, the National Audit Office's 'Good Practice Contract Management Framework' is a good starting point. It outlines eleven key contract management activities to be aware of, though not all are relevant to managing every contract:

1. Planning for contract management and governance
2. Ensuring the right people are in place to manage contracts
3. Administering the contract and timetable for delivery
4. Managing relationships internally and externally for delivery
5. Managing supplier performance through monitoring, assessment and enforcement
6. Paying and incentivising suppliers
7. Understanding and managing contractual and supplier risks
8. Managing contract changes and developments
9. Developing and improving supplier performance
10. Developing strategic partnerships with suppliers to achieve mutual benefits
11. Managing wider market intelligence and challenges

<aside> <img src="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/09ef17d1-0460-41f1-b266-a67ba476e931/Ellipse_1_(5).svg" alt="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/09ef17d1-0460-41f1-b266-a67ba476e931/Ellipse_1_(5).svg" width="40px" /> The National Audit Office's Commercial and Contract Management: Insights and Best Practices guidance offers a number of key contract management tips based on common pitfalls, including:

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• [ ] Ensure contracts are understood by all parties - by defining key terms, listening to supplier feedback, and using standardised language.

• [ ] Identify, allocate, plan to mitigate key risks

• [ ] Design performance measures that work, and be flexible to work around them

• [ ] Set a clear framework upfront for managing contracted performance

• [ ] Show leadership on the business outcomes that are most valuable to you

• [ ] Use contract provisions that promote continuous improvement and innovation

• [ ] Identify the outcomes that motivate suppliers and work in partnership to achieve mutual interests