Dec 22, 2008
Last week saw the publication of a report by the National Audit Office (NAO) on the alleged deficiencies in central government service contracts. To download a copy click here. The content of the report can be summed up nicely from a sentence in the Press Release which said; "better contract management could potentially generate estimated savings of between £160 million and £290 million a year, across total annual expenditure on service contracts of around £12 billion". The findings of this review are very similar from one carried out in London by the London Fire and Emergency Planning Authority (LFEPA) in 2006 which found similar shortfalls in local government. Again, a copy can be downloaded from the SPS site here.
For seasoned practitioners, none of this is new. Too many contracts are badly planned, with the objective being to let the contract in the quickest possible time that regulations allow. After the contract is let, then for many, contract management is about ringing up the contractor when things go wrong. Relationship Management hardly ever gets a look in, except for one or two exemplary individuals that have realised that there is much to be had from not only ensuring the contract is executed, but that wherever possible standards are exceeded and cost overspills minimised.
Hopefully, 2009 will see contract managers from diverse organisations, who are using the same suppliers, actually meeting, networking and comparing information and exchanging knowledge. Usually the challenges facing different organisations have much in common, and it is neither in the client organisation's interests nor the contractors to have to find multiple solutions to the same problem. If they do, then guess who ends up paying?
Thank you to the hundreds of readers of this blog. Do feel free to comment on the stories rather than just view them. So that is it for 2008. May I wish you a Happy Christmas and great New Year!