News

OGC chief calls for better service contract management across Whitehall

Released on 19/12/2008

OGC chief calls for better service contract management across Whitehall

 Today, the Office of Government Commerce (OGC), in conjunction with the National Audit Office (NAO), has launched a good-practice framework to support Government departments in raising service contract management capability. The framework accompanies a report by the NAO on service contract management by Government.

 The new framework is part of OGC's ongoing work to achieve even better value for money from the £175 billion the public sector spends each year on third party goods and services. 

 Developed in conjunction with the NAO the framework is a good-practice guide for managing all types of contracts.  It is particularly relevant for long term contracts (five years plus) where customers need to ensure that service levels and value for money are maintained over the duration of the contract. The framework will provide the foundation for the OGC's revised guidance on contract management, due to be published next year.  

 OGC Chief Executive, Nigel Smith said:

"Every effort must be made to ensure that the Government obtains value for money from its contracts. I am calling on Whitehall departments to further engage with OGC's reform agenda, to help improve the management of Government contracts and contribute to the Government's efficiency savings. We welcome the NAO report, which provides additional impetus to our work and highlights where more work can be done. In conjunction with the NAO we are today launching a good-practice framework to help raise contract management capability in departments across Government."

 Tim Burr, head of the National Audit Office, said today:

"Central government spends around £12 billion each year on service contracts, many of which are critically important to the delivery of its objectives.  Improving the way these contracts are managed would not only save money, but also improve services and reduce risk.  There are examples where public bodies and suppliers have worked together to improve services and reduce costs.  There remains a need for more qualified people to manage these contracts, and for clear performance indicators to show whether services match up to contract objectives."

 The OGC has already a number of successful initiatives underway to identify shortfalls and foster best practice in Government's management of service contracts. OGC's departmental Procurement Capability Reviews (PCRs) provide an independent and strategic view of the overall procurement capability of departments and their wider network of agencies, identifying exemplars as well as areas for improvement.

 Furthermore, the Government Procurement Service (GPS) led by Nigel Smith aims to create a sustainable balance of appropriately skilled and suitably managed procurement professionals to match the scale and complexity of the Government's delivery agenda. The GPS Reform programme has successfully launched the Government Procurement Graduate Scheme; developed skills frameworks for procurement practitioners and leaders, and posted a cross-Government online Skills Development Directory. It also has plans to refresh core procurement qualifications and support the design and development of new learning and development products including specialist contract management interventions.

 The NAO report highlights some of the good work already being undertaken by departments on improving service contract management. For example, a benchmarking exercise resulted in the Home Office saving £17 million a year on its IT contract, around 20 per cent of the total annual contract expenditure.

 The good-practice contract management framework is available via www.ogc.gov.uk

 Notes to editors

About the good practice contract management framework

 The framework covers the procurement cycle from when a contract is let and the service is operational. It does not cover the tendering/contract award stage or when a contract expires or is terminated, for example, disposal of equipment or handover to a new supplier is not covered.  Guidance on these stages and on contract management skills is available on the Office of Government Commerce's website www.ogc.gov.uk. 

 About OGC

The Office of Government Commerce (OGC) is an independent office of HM Treasury, established to help Government deliver best value from its spending.  The OGC works with central Government departments and other public sector organisations to ensure the achievement of six key goals:

Delivery of value for money from third party spend; 
Delivery of projects to time, quality and cost, realising benefits; 
Getting the best from the Government's £30bn estate; 
Improving the sustainability of the Government estate and operations, including reducing carbon emissions by 12.5% by 2010-11, through stronger performance management and guidance; 
Helping achieve delivery of further Government policy goals, including innovation, equality, and support for small and medium enterprises (SMEs); 
And driving forward the improvement of central Government capability in procurement, project and programme management, and estates management through the development of people skills, processes and tools. 
 

OGC provides policy standards and guidance on best practice in procurement, projects and estate management, and monitors and challenges departments' performance against these standards, grounded in an evidence base of information and assurance.  It promotes and fosters collaborative procurement across the public sector to deliver better value for money and better public services; and it provides innovative ways to develop Government's commercial and procurement capability, including leadership of the Government Procurement Service.

For media enquiries only contact:
Liam English, OGC Press Office
T: 020 7271 1318
F: 020 7271 1345
E: liam.english@ogc.gsi.gov.uk

Contact details:
OGC Service Desk
Tel: 0845 000 4999
E-mail: ServiceDesk@ogc.gsi.gov.uk

Contact details:
OGC Service Desk
Tel: 0845 000 4999
E-mail: ServiceDesk@ogc.gsi.gov.uk