COVID-19: Managing non-essential contracts during the COVID-19 crisis

It is important to realise that the need for strong contract management on non-essential contracts still exists during the current COVID-19 pandemic.

This blog considers some of the steps contracting authorities can implement, including better communication with contractors, providing supplier relief, and giving the supply base more responsibility for ensuring targets are met.

The public sector is open for business

The public sector is very much open for business and has been issuing contract throughout the Coronavirus pandemic to meet its ongoing requirements for a vast range of goods, works and services.

The landscape remains positive with lockdown lifting slightly and government, citizens and business all looking forward to a ‘new normal’. However, during this uncertain time it is important that you are managing non-essential contracts efficiently.

Managing non-essential contracts during the COVID-19 crisis

Despite staff currently being reassigned to other duties, furloughed or working from home in many contracting authorities, the day to day management of non-essential contracts still needs to take place. However, the shape of that may need to change.

Obviously, the degree of contract management that needs to be applied could be adjusted across certain areas, with the people taking on those responsibilities changing for an interim period, where feasible.

There are three main areas to contract management: service delivery management, which ensures the authority gets what it’s paying for; relationship management, which should aim to minimise any problems; and contract administration, which handles the governance of the contract and any changes.

Service Delivery Management

Traditionally in contract management, the service delivery management has been the responsibility of the Contract Manager. Currently, in many authorities, contract managers have been assigned to more business-critical contracts and other options need to be considered.

The responsibility for managing non-essential and non-critical contracts could be re-assigned to various parties.

Stakeholders

In some instances, stakeholders may be the ideal parties to assign to manage contracts. Their knowledge of the requirement and outcomes, aligned to their need to ensure continuity of the deliverables, could make them the ideal choice to manage the contractor.

End Users

End users often have a better understanding of the day to day requirements that need to be delivered than any other party within an authority. As the recipient of the contract they have a greater need to ensure that the contractor continues to deliver to the service levels agreed in the contract, if only to ensure that they, themselves, are not faced with problems.

Contract Administrators

Many contract managers are supported by one or more contract administrators, who handle the essential aspects of the contract including collation of management information, charges and payment procedures and resource management. Their knowledge of the contract, required outcomes, KPIs and Service Levels is often second only to that of the Contract Manager. This skillset could make them an ideal short-term replacement and could, in the longer term, help develop more contract managers across the contracting authority.

Contractors

Contracting authorities could consider which of their current contractors could take up the responsibility of self-managing during the current pandemic. Where a good robust relationship is present and few or no issues ever occur in the contract, the contractor may see this as a positive statement of how they are viewed within the authority. Many contractors are meticulous in how they manage contracts with the public sector, aware that major failings in one contract can have a serious knock-on effect on future opportunities. Allowing the contractor to manage the contract may have a more positive impact than you would imagine.

Consultants

Another option open to contracting authorities would be to engage the services of external consultants to take on the role of contract manager. However, this would be an expensive stop-gap and determining the length of such an engagement may be difficult. Likewise, the current guidance on social distancing may make this a non-starter if the consultant would need access to the authority’s or contractor’s premises.

Relationship Management

No matter which option is selected to manage the delivery of the contract, it is essential that, at the very least, a level of supplier and relationship management be undertaken.

Contractors need guidance on what is expected, even if given a greater level of responsibility on delivering the contract itself.

Care needs to be taken to ensure that any replacement for the contract manager is immediately notified to the contractor and similarly, the contractor needs to be made aware that any change in personnel from their end needs to be conveyed to the authority promptly. Even such a low level of interaction will help to ensure that the relationship is maintained and will provide a level of comfort to the contractor that the authority continues to view their contract as important.

Supplier relationship management software can support your organisation with this and will discipline your organisation’s processes and help your employees to strategically plan and manage interactions with suppliers.

Contract Administration

Contract administration is a key element of good contract management and it is essential that this continues to be performed across contracts as far as is possible.

As previously noted, this role manages the reporting, payment and other resource and planning responsibilities and these will need to continue if the contract itself is continuing to be delivered. Most importantly, however, contract administration manages an even more critical responsibility – that of contract change control, where an authority has either extended, modified or suspended a current contract. Any change, whether linked to the current COVID-19 pandemic or not, needs to be recorded and justified for future audit purposes, making the contract administration role one of the key elements in controlling both essential and non-essential contracts.

How can Delta help?

Public sector bodies should not forget the importance of non-essential contracts to ensure that public services are kept running and to ensure that their suppliers are not facing financial difficulty during this time.

Delta eSourcing is an end-to-end eSourcing suite that allows buyers to take control of their procurement and contract management processes, ensuring compliance with the procurement regulations.

For more information on Contract Management Systems, read our “Benefits of Contract Management” blog.

As the COVID-19 situation evolves, public procurement regulations will be under constant review from the Government. Delta eSourcing, along with our sister brand, PASS, will continue to update our customers and community on these updates. To find out more information for procurement buyers during the pandemic, and to receive further support, visit the PASS COVID-19 buyer resources page.