Why review contract performance?
Reviews tell an Agency:
- whether the anticipated benefits of the contract have been received
- if the contract represented value for money
- if there are opportunities for further improvements
- what lessons can be learned and how can they be implemented.
- captures knowledge for re-use in other contracts
The scope of the end of contract review should have been set out in the procurement plan.
Contract review activities may be staged, for example:
- review the planning process once the invitation document have been completed
- review the sourcing process once the contract has been awarded
- progressively during the delivery of the contract
Apply learning once a review is completed.
How to review contract performance
Step 1: Consider independent reviewers
Is the contract significant to the Agency?
- If yes, consider engaging and independent auditor or specialist to conduct the review, and go to Step 2.
- If no, go to Step 2.
Step 2: Determine contract review activities
Contract review activities may involve:
- contract review meetings
- financial assessments
- benefits assessments
Involve stakeholders to the contract in the review activities.
Consider:
- achievement of business case objectives
- alignment to policy
- costs and benefits against forecast
- other costs and benefits realised
- timeliness of service delivery
- did the contract represent value for money
- ways of maximising benefits and minimising cost
- ways of minimising risk
- how effective contract management activities were
- how effective relationship management activities were
- end user satisfaction
- changes needed to service delivery
- lessons learned and ways to implement learnings
Step 3: Conduct contract review
Conduct contract review activities. Usually the senior business owner or sponsor of the initiative is responsible for the review.
Use the data gathered from monitoring, evaluation and feedback from users. The main sources of documented information will include:
- the business case
- the procurement plan
- information kept to track costs and benefits
- previous review reports
The review should involve team members:
- with working knowledge of the procurement process
- with working knowledge of the business area under review
- involved in managing the delivery of the contract
- with relevant specialist or technical knowledge
Conduct reviews in an open manner, with participants open to:
- learning
- taking constructive criticism
Analyse the information gathered to compare what actually happened against what was planned.
Examine what was done well and what was done badly.
Formulate coherent, useful and supportable recommendations. Recommendations must be robust enough for the Agency to be able to act on them.
Step 4: Communicate findings to service provider
Communicate findings of the performance assessment to the service provider.
Pass this information on in a timely manner.
Invite service provider to provide feedback on the Agency’s performance.
Step 5: Manage probity and conflicts of interest
Manage probity – consider issues raised at Probity issues by stage and task.
Conflicts of interest can arise during this task. Identify, declare and manage these.
Step 6: Address Agency rules
Consult Agency procurement team for advice on meeting:
- procurement rules and policies
- Agency specific rules and policies related to monitoring performance
Follow Agency specific rules on when to seek an approval and who can give the approval.
Follow Agency specific rules for recording decisions and storing records.
Step 7: Create and retain records
Follow Agency specific processes to record performance monitoring activities. Good record keeping helps to:
- manage risk
- provides auditable evidence of events and decisions
Step 8: Implement findings of the review
For the review to add real value, its recommendations need to be implemented.
This might mean changing:
- policy
- business systems or processes
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