Risks of not managing and monitoring contracts

Contract not monitored

Risks

  • Standards fall and goods/services are not as required under the contract
  • Opportunities for possible improvements are not identified or investigated and improved value for money is not achieved

Solutions

  • For service contracts ensure a Service Level Agreement (SLA) is developed, agreed and signed by all parties and use this to measure performance of contractor
  • For all contracts, seek feedback from end users and take action should problems arise
  • Hold regular meetings with the contractor and either ask a number of end user representatives to attend or seek their views beforehand
  • Encourage suggestions from all parties on how the contract could be improved (to the benefit of both sides)

Minor problems are not dealt with

Risks

  • Minor problems develop into major problems
  • Standards fall and goods/services are not as required under the contract
  • The contractor believes that you are happy to receive the lower quality of service and it may be difficult to raise the standards again
  • Staff unhappy with the contract do not use it but purchase the product from a non-contracted supplier

Solutions

  • Seek regular feedback from both the end users and the contractor
  • Review complaints and perceived problems, look for patterns and common causes, seek to find solutions
  • Seek feedback from the contractor

Relationship becomes too ‘cosy’

Risks

  • The contractor and end users become complacent and opportunities to gain improved value for money are missed
  • The contractor believes that you are happy to receive the lower quality of service and it may be difficult to raise the standards again

Solutions

  • While partnership relationships are encouraged these should be market tested by tendering the requirement on a regular basis (at least every 4 years)