Contract management

Principles for service contracts

Contract management guidelines

Principles for service contracts

Contract management guidelines

Contents
Management summary 1 Introduction 1.1 Scope and purpose of these guidelines 1.2 What is contract management? 1.3 Getting the contract right 1.4 New approaches, new attitudes 1.5 Critical success factors 1.6 What can go wrong, and why Overview 2.1The customer–provider interface 2.2 Intelligent customer capability 2.3 The contract management lifecycle Managing service delivery 3.1 Service level management 3.2 Measuring quality 3.3 Value for money 3.4 Risk 3.5 Benchmarking 3.6 Business continuity Managing the relationship 4.1 Why relationship management is important 4.2 Communication 4.3 Culture 4.4 Handling problems Contract administration5.1 Elements of contract administration 5.2 Contract maintenance 5.3 Change control 5.4 Management reporting 5.5 Asset management Seeking improvements 6.1 Incentives 6.2 Continuous improvement 6.3 Benefits based payments 6.4 Added value 5 9

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Managing changes 7.1 Drivers for change 7.2 The implications of change 7.3 Preparing for change7.4 Types of change Roles and responsibilities 8.1 Senior management – customer and provider sides 8.2 Contract manager – customer side 8.3 Contract manager – provider side 8.4 Relationship managers – customer and provider side 8.5 The people who use the service Annex A Case study: building a partnership Objectives How it worked out in the early stages Communication The pace of change ine-business Efficiency Benchmarking Recompetition Further information OGC guidance Commercially published guidance Other publications

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© Crown Copyright 2002 This is a Value Added product which is outside the scope of the HMSO Click Use Licence. Applications to reuse, reproduce or republish material in this publication should be sent to: HMSO, Licensing Division, St ClementsHouse, 2-16 Colegate, Norwich, NR3 1BQ Tel No (01603) 621000 Fax No (01603) 723000, E-mail: hmsolicensing@cabinet-office.x.gsi.gov.uk or complete the application form on the HMSO website www.hmso.gov.uk/forms/cform2.htm HMSO, in consultation with Office of Government Commerce (OGC) will prepare a licence based on standard terms tailored to your particular requirements including payment terms.Management summary
About these guidelines These guidelines cover the issues involved in managing long-term service contracts following contract award. The main areas covered are managing service delivery (formal governance), managing the relationship, contract administration, seeking performance improvements, and managing changes. This guidance does not cover the process of creating a commercialarrangement. These guidelines are aimed at public sector managers responsible for managing longterm commercial arrangements with the private sector. It aims to help them manage the contract and the relationship to give value for money and improve performance. This document is intended as a guide for management rather than practitioner level guidance. Overview Contract management activities can bebroadly grouped into three areas. • • Service delivery management ensures that the service is being delivered as agreed, to the required level of performance and quality. Relationship management keeps the relationship between the two parties open and constructive, aiming to resolve or ease tensions and identify problems early. Contract administration handles the formal governance of the contractand changes to the contract documentation.

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All three areas must be managed successfully if the arrangement is to be a success. In addition, good preparation and the right contract are essential foundations for good contract management. The arrangement must also be flexible enough to accommodate change. A key factor is intelligent customer capability: the knowledge of both the customer’s...