Transcript Introduction to Contract Management Framework Workshop

Procurement Transformation Division
Introduction to Contract Management
Framework Workshop
12 – 17 September 2014
Presented by Samantha Mathers
Centre of Excellence, Procurement Transformation Division
Workshop outline
1. Purpose & objectives of this workshop
2. Why is contract management important?
3. QAO Audit Report Recommendations
4. Overview of One Government CMF
5. Supporting tools and templates
6. Effective contract management begins with early planning
7. Value / risk approach to contract management
8. Roles and responsibilities defined in the CMF
9. Contract management plans
10. Contract extensions & renewals
11. Operationalising the CMF in Agencies
12. Re-cap key messages
13. Further training and next steps
Introduction to Contract Management Workshop
12 - 17 September 2014
“A pessimist sees the difficulty in every opportunity.
An optimist sees the opportunity in every difficulty”
Which do you choose to be?
Introduction to Contract Management Workshop
12 - 17 September 2014
1. Purpose & objectives of this workshop
Purpose of this introductory workshop:
•
to provide you with important information and improve your understanding of the new
Contract Management Framework (CMF) and supporting tools,
•
so you can share knowledge and provide similar workshops within your own Agency.
Directed at ‘contract management leaders’
Objectives are to provide attendees with:
•
an overview of the new CMF and supporting tools/templates & key messages
•
an understanding of the key drivers behind the establishment of a contract
management framework and supporting tools
•
a better understanding of how some of the most frequently used tools are intended to
be used (e.g. value risk matrix, contract management checklist, contract management
plan, contract extension & renewal checklist)
•
a presentation pack, that can be used to conduct training & information sessions within
your Agency.
Not a substitute for more comprehensive contract management training
Introduction to Contract Management Workshop
12 - 17 September 2014
2. Why is contract management important?
Role of contract management in
retaining and improving value for money
Benefits of contract
management:
• Obtaining value for
money
Effective contract / supplier
management
Value for
money
The effective management
of contracts with suppliers
is critical to Queensland
Government maximising
benefits from procurement:
VfM achieved
through
procurement
• Managing risk
• Maximising end user
outcomes
Contract
management
benefit
Poor contract
management
Procurement
Activities
Ongoing contract management
(& category management activities)
Time
Introduction to Contract Management Workshop
12 - 17 September 2014
Introduction to Contract Management Workshop
12 - 17 September 2014
3. QAO Audit Report Recommendations
1. Improve capability
2. Value / risk approach
Develop and implement a
contract management capability
framework
Apply a value/risk matrix to define
expectations for contract management and
appropriate resource allocation to contracts
 On-line procurement induction
program to include contract
management module
 Contract management training
 Value/risk matrix
 One Government CMF
 Contract management plan &
Contract management checklist templates
3. Contract extensions
& renewals
4. Contract management
lifecycle system
Validate value for money before
extending/renewing a contract, through
assessment of contract risk, demand, supply
market & supplier performance
 Checklist for contract extensions/renewals
 Fact Sheet (including FAQ’s)
 Contract Review Report template
 One Govt CMF
Implement a contract management lifecycle
system to enable spend analysis, monitoring
of supplier performance, early triggers to
prepare for contract expiry
 Q-Contracts
 Supporting processes
 Contract register
Introduction to Contract Management Workshop
Q-Contracts
12 - 17 September 2014
4. One Government Contract
Management Framework (CMF)
Background to its development
Purpose
• Consistency
• Ensure contractual obligations are met, risks are managed, value obtained
• Describes the 3 major phases of the contract management lifecycle and key activities:
•Phase 1 – Contract set up
•Phase 2 – Contract management
•Phase 3 – Contract close out
Scope: focus is on contract management once a contract is in place (although planning is key)
Supporting materials:
• Tools & templates (see next slide)
• Fact sheets: Value Risk Matrix, Extending & Renewing Contracts
• Procurement guidance – Managing and monitoring supplier performance
Introduction to Contract Management Workshop
12 - 17 September 2014
5. Supporting tools & templates
Phase 1 – Contract set up tools and templates
Value/risk matrix
Classify a contract (as either routine, focused or strategic) based on
value and risk.
Contract management checklist
Suitable for routine contracts – a brief summary of key information
relevant to contract management.
Define the key activities and responsibilities for managing the
contract.
A guide for the contract kick-off meeting.
Contract management plan
Contract kick-off meeting template
Phase 2 – Contract management tools and templates
Contract performance review
meeting template
Risk register template
Support the contract manager to conduct and document a contract
performance review meeting.
Record and maintain a single repository for contract risks.
Checklist for contract
extensions/renewals
Record the value for money assessment of a contract extension or
renewal (suitable for routine contracts)
Contract review report
Record the analysis performed and recommendation to extend or
renew a contract, or transition to other suppliers.
Phase 3 – Contract close-out tools and templates
Lessons learned log template
Document lessons learned throughout the contract lifecycle.
Close-out check list
Confirm all close-out activities have been performed.
Introduction to Contract Management Workshop
12 - 17 September 2014
6. Effective contract management begins
with good planning in procurement phase
Contract management requires involvement during the Procurement process and not simply after the
contract has been awarded.
Effective contract
management starts at the
sourcing process through to
the relationship management
of the supplier to ensure the
optimum efficiency and
increased service levels so
as to avoid having to utilise
contractual terms to achieve
the performance
expectations.
It’s a process that requires
teamwork and partnership
skills through regular
reviews and engagement.
Introduction to Contract Management Workshop
12 - 17 September 2014
7. Value / risk approach
Value risk approach to contract management provides flexibility, requiring
common sense & good judgment
•
Contract management framework adopts a value/risk approach. Depending
on how the contract is classified based on value and risk, the activities, focus
and amount of effort can vary (see table on page 7 of CMF identifying whether
key activities are required, recommended or optional).
•
Discretion allowed, based on value & risk of contract. Apply common sense &
good judgment. E.g. ‘routine’ contracts should be ‘light touch’.
•
Value/risk assessment helps identify capability required to manage a contract
What is the role of the value/risk matrix (VRM)?
•
VRM available at: http://www.hpw.qld.gov.au/aboutus/ReportsPublications/Guidelines/Pages/ContractManagementGuidelines.aspx
•
How to use the matrix
•
Some background about the questions on value (cost and ‘non-cost’ value) and risk
•
Flexibility for Agencies to apply their own risk assessment methodology to answer questions
about risk
Introduction to Contract Management Workshop
12 - 17 September 2014
8. Roles and responsibilities defined
What is:
•
•
•
a Contract Owner?
a Contract Manager?
a Contract Administrator?
More collaboration between
sourcing lead (procurement) and contract manager
•
Early identification of contract management skills/capability needed
•
Contract managers contribute subject matter expertise & experience
•
Sourcing lead in best position to develop contract management plan
(in consultation with contract manager – see next slide)
Better handover between sourcing lead &
contract manager = smoother transition
Don’t “throw it over the fence!”
Introduction to Contract Management Workshop
12 - 17 September 2014
9. Contract management plans (CMP)
“…To support the contract start-up and effective contract management, most of
the work required for developing a contract management plan can and should
be done before the contract is signed …” (Australian National Audit Office Better Practice
Guide on Contract Management http://www.anao.gov.au/Publications/Better-Practice-Guides
Sourcing lead is responsible for developing the CMP
(see below extract from RACI in Contract Management Framework)
Activity
1.4 Finalise contract
management plan
Sourcing Lead
Contract
Owner
Contract
Manager
R
I
A
Contract
Administrator
Supplier
Key users
C
C
•
Sourcing lead in best position to develop contract management plan
•
Incorporate knowledge acquired through sourcing process & contract negotiations (e.g. risks to manage)
•
Develop in consultation with contract manager
Our templates:
Contract Management Checklist & Contract Management Plan
•
You can use a CMP for multiple contracts (e.g. to manage a group of contracts under a SOA)
•
Save a copy in Q-Contracts.
•
Keep it up to date – the CMP is a living document (not ‘set and forget).
Introduction to Contract Management Workshop
12 - 17 September 2014
10. Contract extensions and renewals
• QAO findings & recommendations
• Defensible position
• Checklist for contract extensions
and renewals – what is its purpose?
• Contract Review Report template –
when should it be used?
• Fact Sheet for Contract Extensions
and Renewals – FAQ’s and useful
examples
• Examples of when contracts might be
extended/renewed (see Fact Sheet)
• Record keeping – keep a copy in QContracts (or contract management
system used by your Agency)
Introduction to Contract Management Workshop
12 - 17 September 2014
11. Operationalising the CMF in Agencies
What can agencies do to start ‘operationalising’ the CMF?
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•
•
•
•
•
•
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Deliver introductory workshops (like this one).
Develop process and Agency specific guidance (if necessary)
Review & update any existing policies, procedures, guidance material to align with CMF
and use tools available.
Adapt the templates to further improve them as a ‘custom fit’ for your Agency.
Participate in training & capability development initiatives
Identify contract managers in your Agency (and share contacts with PTD)
Share learnings & materials with PTD
and other Agencies
Ask for help if you need it
Introduction to Contract Management Workshop
12 - 17 September 2014
12. Re-cap on key messages
•
One Government CMF and supporting tools and templates are available to use
•
Become familiar with the roles and responsibilities identified in the CMF
•
Need for greater collaboration between procurement/sourcing teams and contract
managers in planning and development of contracts, and contract handover.
•
Sourcing lead (procurement) is responsible for developing contract management
plan
•
Identify contract managers early so the ‘right people’ manage the ‘right contracts’
•
Templates can be adapted by Agencies & modified to suit
•
Value / risk approach to contract management requires sound judgment and
common sense to be applied
•
For contract extensions & renewals use the Checklist and other tools / guidance
material available
•
Be diligent with record keeping
•
Contract management implementation by Agencies should be consistent with CMF
Introduction to Contract Management Workshop
12 - 17 September 2014
13. Further training & next steps
Contract management capability training & development … coming soon
•
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PTD is in the process of selecting a training provider (to be appointed by end Sept 2014)
3 discrete contract management training workshops to be developed:
–
–
–
•
•
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Contract management fundamentals (1 day)
Advanced contract management (2 days)
Master class (1 day)
Training provider will offer coaching and support program (for 6 months) after workshops
Pilots (of workshop) will begin in October-November
Roll-out ready by mid November 2014, with training schedule to be developed by supplier
based on forecast demand from agencies
Next steps:
• PTD is looking into the best way to deliver introduction workshops to regional areas
• Agencies can begin ‘operationalising’ CMF
• Contract management ‘leaders’ deliver introductory workshops within Agencies
Questions:
• Contact Sam Mathers at [email protected] or
• Gully Chaudhry at [email protected] or
• [email protected]
Introduction to Contract Management Workshop
12 - 17 September 2014