building a structured approach to contract management

Building A Structured Approach To Contract Management Created By: James Sinclair and Tracey Watts

Our Vision

2

To develop an innovative, flexible and competitive market capable of meeting the local needs of SCF and providing excellent value.

To ensure the Authority's commercial and social interests are protected through clear contracts and that suppliers' performance is monitored to ensure excellence and continuous improvement for our customers

We will achieve this whilst promoting our values of:• Focussing on our customer (both ECC and

the end user) and proactively driving improvements to their service

• Enabling and empowering these customers• Maintaining honesty, integrity and

approachability

In practice this means we will need to:

1.Ensure we have recognisable contracts in place for all of our spend, starting this process with our high spend and high risk areas

2.Ensure those contracts have adequate and appropriate performance indicators in place which measure how our suppliers support our children to grow and develop in their time with the supplier and that we actually measure and react to these

3.Have a clear and well defined structure for dealing with contract queries and performance issues, with all relevant parties consulted at the right time and with the right information so concerns are never lost

4.Understand our suppliers, to ensure we are aware of any commercial risks in their organisation which could stop or impact on them providing care for our children and respond to these risks appropriately before they get out of hand.

5.Understand how much care actually costs, discussing this with our suppliers and working with them and our internal care experts to take cost out where possible and appropriate.

6.Communicate - Discuss our needs/ new ways of doing things/ anything of use with our suppliers, peers and others.

Step 1 – Understanding our suppliers and contracts

RIS

K

VALUE

Residential Homes

Residential Education

FosteringCWD Day RespiteCWD

Support

RiskRisk of harm to child if service is not performed or quality is poor

ValueHigh Value is defined as £1m per annum or more

Children’s Centres

StrategicSignificant

KeyMaintain

Definitions

High Level Family Support

EY Quality and Sufficiency

Advocacy

CWD Shortbreaks/

activities/ clubs

FIFResearch Wellbeing

Survey

Supported Housing

CWD Resi - Respite

CWD Shared Care

MST

In consultation with service area and use of the contract register we identified our key areas of spend and the contracts we had in place in these areas

Tiering our areas of spend:

Segment Activities Output Reported to

Mobilisation Identify roles and responsibilities for the provider and authority. Identify key stakeholders Hold Risk review meetings with Key stakeholders Finalise Key performance indicators, supplier reporting structure

and contract review format.

Operations Suppliers to provide quarterly report to contract manager. Contract manager to complete KPIs survey via Ariba and produce

Analytical report. Quarterly contract management reviews to be conducted Update risk register and supplier action plans Review and log contract benefits for the quarter. Internal service meetings to be held to share issue logs,

performance and updates. Contract manager to produce quarterly contract performance

report using standard template. Contract Manager to review provider tiering every 6 months. Contract Manager to complete Annual compliance auditing

proportionate to the value of spend with suppliers..

Contract termination• Contract manager to conduct Contract closing meeting with

provider following standard template.• Contract manager to complete contract termination checklist.• Final contract review report to be produced including lessons

learnt. • Archive contract management documentation.

Mobilisation• Operations manuals• Stake holder map• Risk Register • Finalised Key Performance

Indicators• Contingency plans • Standard contract agendas • Template contract performance

reportOperations• Supplier Reports• KPI comparison reports • Contract review minutes • Issue Logs• Benefits tracker • Supplier action plans• Provider tiering• Compliance audit checks • Summary report

Contract termination• Contract termination checklist• Final contract review report

Mobilisation Report on mobilisation to

DCB on exception basis if issues or expected delays

Operations• Quarterly report on

performance against contract incorporating highlights from output areas presented to DCB

Contract Termination• Final contract review

report shared with DCB with details on how lessons learnt are incorporated in to new procurement if necessary

Stra

tegi

c

Note – those tasks in red will only be required for top tier suppliers or alternatively will only be required at longer intervals

Strategic Area:


Mobilisation Identify roles and responsibilities for the provider and authority. Identify key stakeholders Finalise Key performance indicators, supplier reporting structure


Operations Suppliers to provide quarterly report to contract manager. Contract manager to complete KPIs survey via Ariba and produce

Analytical report. 6 monthly contract management reviews to be conducted Update risk register and supplier action plans Review and log contract benefits every 6 months. Internal service meetings to be held to share issue logs,

performance and updates. Contract manager to produce 6 monthly contract performance

report using standard template. Contract Manager to review provider tiering every year. Contract Manager to complete Annual compliance auditing. Supply Chain Manager to understand cost base of service and

work to identify areas where cost could be taken out, price reduced or quality improved

Contract termination• Contract manager to conduct Contract closing meeting with

provider following standard template.• Contract manager to complete contract termination checklist.• Final contract review report to be produced including lessons


Mobilisation• Operations manuals• Stake holder map• Risk Register • Finalised Key Performance

Indicators• Standard contract agendas • Template contract performance

report

Operations• Supplier Reports• KPI comparison reports • Contract review minutes • Issue Logs• Benefits tracker • Supplier action plans• Provider tiering• Compliance audit checks • Summary report• Supply chain management

report detailing projects and benefits identified and timescales for completion

Contract termination• Contract termination checklist• High Level final contract review

report

Mobilisation Report on mobilisation

to DCB on exception basis if issues or expected delays

Operations• Yearly report on

performance against contract incorporating highlights from output areas presented to DCB

Yearly report on supply chain management projects

Sign

ifica

nt

Note - those tasks in red will only be required for top tier suppliers or alternatively will only be required at longer intervals

Significant Area:


Mobilisation Identify roles and responsibilities for the provider and authority. Identify key stakeholders Hold Risk review meetings with Key stakeholders

Operations Update risk register and supplier action plans on a quarterly basis Internal service meetings to be held to share issue logs,. Contract Manager to complete Annual compliance auditing.

Contract termination• Contract manager to complete contract termination checklist.• Final contract review report to be produced including lessons


Mobilisation• Operations manuals• Stake holder map• Risk Register

Operations• Issue Logs• Supplier action plans where

necessary• Compliance audit checks

Contract termination• Contract termination checklist• High Level final contract review

report

Mobilisation Report on mobilisation

to DCB on exception basis if issues or expected delays

Operations• Risk update from

bottleneck to be incorporated as part of yearly update on all key contract performance for SCFK

eyKey Area:

Maintain AreasSegment Activities Output Reported to

Mobilisation Identify roles and responsibilities for the provider and authority. Finalise Key performance indicators, supplier reporting structure


Operations Review and log contract benefits on annual basis

Contract termination• Lessons Learnt from contract to be fed from service to the

procurement team

Mobilisation• Finalised Key Performance

Indicators • Template contract performance

report

No reporting requirements for this level of contract unless specifically requested

Mai

ntai

nMaintain Area:

Step 2 - Measuring our suppliers

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Outcomes and performance indicators

The benefits of performance management:

• Identifies the aims of the contract• Ensure value for money• Identify poorly performing providers• Ensure remedial actions are identified and completed• Identify providers achieving good performance• Manage risks• Achieve the aims of the contract• Provides valuable information to future contracts

Maintain AreasOutcomes and performance indicators

Definition of an outcome:An outcome is the intended result and the reason for commissioning services. E.g. Economic prosperity available to all.

Definition of an Indicator:A measure that helps to quantify the achievement of an outcome but is not solely attributable to the provider. E.g. The % of working age people in unemployment across the county..

Performance measure:The specific, measurable, achievable, relevant and time bound targets in place to monitor the performance of a contract. E.g. The % of 16+ young people placed with a provider attending further education, training or in employment.

Exercise 1 :

1. From Hand out Identify the Outcomes, indictors and performance measures from the list provided.

2. In relation to your own contracts discuss and identify the key outcomes, indictors and performance measures. Each group to feedback 1 example.

Maintain AreasMeasuring these indicators:

Step 3 - A structured approach to how we work

Example of how we

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S I P O C

ART Team

Receive New provider set up

template – states urgent/ not

UPLOADING NEW SUPPLIERS

Send ICC (include

breakdown of costs)

Is it urgent?

Complete in 24 hours

YES

Complete in 3 days

NO

Review documentation

Is price acceptable

Award letter Supplier

NegotiateSend Variant award letter to supplier

YES

Receive acceptance

from supplier

Upload to ARIBA and

notifyPlacement

Team

Notify key relevant

commissioners

Organise home review visit

Visit home, assess and complete form B - confirm whether

acceptable

Notify Contract Support Officer

HOME REVIEW PROCESS

Social Worker

Receive Termination

Form

Assess reasons for termination

against contract terms

Termination Email Customer

TERMINATING SUPPLIERS

SUPPLIER INPUT PROCESS OUTPUT CUSTOMER

MONITORING OF SUPPLIERS

Cragg Admin

Request to identify what suppliers we

have

Send placement list to Cragg

Admin

Receive allocation of

visits from Cragg

Contract Manager

Contract Manager

An example of how we structure our service:

Step 4 - Managing Risk

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Thinking about your own contracts consider the areas where things could go wrong and identify a list of potential risks. Consider areas such as;

- The mobilisation period of the contract- The providers operation- The internal risks - The contractual risks - Safeguarding risks

10 minutes

Exercise 2 – Managing risk

building a structured approach to contract management

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