National Treasury Framework roll-out offers contract improvements

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ServiceDeliveryProtest.jpgThere is significant value to be had by government entities adopting the first phase of National Treasury’s Contract Management Framework (The Framework), Paul Maddison, Managing Director at Realyst Contract Management, tells SmartProcurement.

The first phase of The Framework requires a government entity to draft a contract register. This would have an immediate benefit for the entity, says Maddison.

In delivering any strategic initiative, it is necessary to determine a starting point; a contract register provides this information.

“Having a single view of contracted commitments and revenue is an enormous step forward in launching a contract management initiative. From there you can consider what steps need to be put in place to achieve your strategic goals.

However, he notes that many government entities have fallen short of meeting the compliance deadlines for phase one, as reflected in the Auditor General’s reports.

Some government entities currently fail to secure three key deliverables in the contracts they enter into:
• Managing risk.
• Value for money.
• Service delivery.

A contract register, read in conjunction with relevant documents, provides a basis from which to begin measuring these deliverables. The agreements themselves will provide information on how well they are drafted, how they protect government’s interests and if they would stand up in a court of law. Benchmarking service types and suppliers will provide information necessary to determine value for money, if there are multiple suppliers for the same service or if multiple contracts exist with the same supplier. This is key to establishing opportunities to drive value for money.

A central view allows management to understand the contracting landscape, and can assign resources to rectify specific areas of exposure, such as expired agreements, agreements that have been in existence for too long, poorly drafted contracts and missing documentation.

Once a contract register has been completed, it is Realyst’s experience that the value of a contract management initiative becomes immediately evident; the purpose of the framework and its intended outcome become very clear: the initiative will not to be seen as an administrative burden, but one that can provide an immediate return.

As a first step on the contract management journey, a central register is a critical value offering to provide momentum going forward.

For more information about the Contract Management Framework in government and how to achieve compliance contact Paul Maddison of Realyst Contract Management at pmaddison@realyst.com

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