One Contract framework guide process for agencies

The Procurement Transformation Division of the Department of Housing and Public Works has released a new One Government Contract Management Framework to assist agencies in effectively managing contracts.

The framework applies to all Queensland Government personnel who are involved in the management of supplier contracts and is supported by practical checklists and templates. A copy of the framework and associated documents can be accessed here.

The framework identifies three benefits of good contract management:

• Value for money can be achieved by identifying savings opportunities during procurement or contract management.
• Contractual risks can be reduced.
• Outcomes to end users and customers can be maximised by ensuring optimum supplier performance.

As one of the initial steps in the contract management process, the framework requires contracts to be classified as routine, leveraged, focused or strategic. That classification occurs after analysis of the value and risk of a contract. The contract management requirements will differ, depending on the classification of the contract.

Although contract establishment is outside the scope of the framework, it is important that government officers are familiar with the requirements of the framework when negotiating contracts with suppliers.

A key point that is made in the framework is that good contract management depends on appropriate planning that must start before a contract is signed. The contractual terms that are agreed by the parties will be a key factor in how the contract can be managed and, therefore, are an important part of contract management planning.

For example, a contractor’s performance should be managed against defined key performance indicators (KPIs), which must be agreed by the parties and incorporated into the contract. The framework provides useful guidance for drafting KPIs and contains a KPI development template. It is crucial that the agreed KPIs are reflected in the contract.

Other important contractual terms that will directly affect contract management are those dealing with recordkeeping, audit rights and reporting. Those contractual terms must be consistent with the contract management strategy an agency intends to implement after contract formation. Otherwise, the agency’s ability to require the supplier to participate in performance management meetings or other strategies will be limited.

^{The information in this publication is provided for general purposes only. It is not to be relied on as a substitute for legal advice. Crown Law and the Department of Justice and Attorney-General accept no liability for losses caused by reliance on the material in this publication. Formal legal advice should be obtained for particular matters.}