Can contract management rescue local government procurement?

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AG.JPGThe Auditor General’s (AG) report on Municipalities made headlines for all the wrong reasons; there is something seriously amiss at the local Government level.

Paul Maddison, MD of Realyst Contract Management, raises the question of how Government can help the local entities right the ship, in this month’s SmartProcurement.

 

South Africa has arguably some of the most well defined frameworks and policies; the challenge is in implementation - it needs skills, champions and commitment.

However, there are few initiatives that can deliver more value than implementing the National Treasury Framework for contract management, says Maddison.

Event Alert! SmartProcurement is hosting a Public Contracts - Governance Workshop on 22 August 2012 in Gauteng, which will discuss the practical and legal implications of, and how to plan for, the new contract management framework.

Why prioritise contract management?

Bearing in mind that Government delivers services through the contracts it enters into, it is no wonder that service delivery is a burning issue in South Africa when more than 70% of Municipalities were qualified on poor supply chain and contract management practices by the AG.

But let’s consider the major challenges:

Service delivery
It’s about making sure suppliers deliver what they promise, and that Government gets value for money. The way to achieve this is through the management of key strategic, high-value contracts - ensuring they are well structured with performance measurements.

Make these contracts visible to management; identify the key milestones and delivery dates; monitor performance and payments against contract deliveries; and have strong documentation as a basis for taking action.

Internal Controls
Know what contracts exist and underpin these with copies of the contract documents.

Assign owners responsible for delivering the contract terms; check what is payable against the contract; report on upcoming expiry dates; and understand the value of spend, where it’s going and how much is spent on administration agreements compared with key delivery items.

Put control in place to reduce the incidence of contracts going beyond their expiry dates, or re-contracting with poor performing suppliers, and standardise agreements that protect Government’s interests.

Skills
Document processes and understand the roles and responsibilities required to manage service providers. This will build contract management competency that can be shared across Municipal entities.

Measure staff performance based on the National Treasury Framework for contract management.

Contract management provides a quick-win for Government
Service delivery can be improved in a short period of time - the concepts and implementation are not difficult; the skills required are easy to train; the processes and requirements are not rocket science.

The country’s municipal entities require the will to improve; champions within the entities; and some guidance on how to the implement framework.

So the building blocks are there. But who in Government is willing to take up the initiative? For assistance with your contract management email Reaylst Contract Management pmaddison@realyst.co.za

Event Alert! SmartProcurement is hosting a Public Contracts - Governance Workshop on 22 August 2012 in Gauteng, which will discuss the practical and legal implications of, and how to plan for, the new contract management framework.

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