Contract Management

Training & Accreditation

Foundation level: takeaway guide

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Document purpose
This guide summarises the key learning points, actions and tools that are covered in the
Contract Management Foundation course. The guide aligns to the contract management
lifecycle (shown below) allowing you to reference and apply what you have learned at the stage
that you require. We have also provided a list of links to useful supporting documents.

If you have any feedback on this guide or would like to know more about how you can continue
to improve your capability in contract management please contact
[email protected]

The contract management lifecycle

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Contents
Stakeholder management 4
Risk management 6
Design and ongoing development 8
Procurement and mobilisation 11
Ongoing contract management 14
Exit and transition 17
Change control 18
Resources and references 21

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Stakeholder management
Stakeholder management is important throughout the contract management lifecycle. You should
undertake stakeholder mapping at the start of the cycle and regularly revisit and update this
throughout the contract lifecycle.

Examples of your contract?s stakeholders may include (but aren?t limited to): media; trade unions;
self-regulatory organisations; finance teams; commercial teams; service users; politicians; the
business; suppliers; and policy leads.

An example of a stakeholder management template

In the matrix below, we have identified several stakeholders that are either impacted by or are
impacting upon a new contract. The contract has just been awarded to Digital Training Inc. to deliver
mandatory training to all staff in your department. The training will be on the new General Data
Protection Regulations.

Head of IT Falls under their remit. They can

and IT have a say on the process but it will
Department be only one part of a large portfolio
Data Responsible for ensuring GDPR
Protection compliance so will drive the
team programme as it will reduce the risk
of expensive non-compliance
GDPR Clearly very interested in the
Champion programme and can have a large
say on the successful
implementation of the programme
Commercial Will expect the contract manager to
Director own the day-to-day and will only be
involved if an escalation is required
Staff Know they have to do it but feels
like a compliance activity, so will
complete the training required
Contract Has a keen interest but their ability
Manager to influence is limited

Figure 1. Stakeholder management template example

1 https://www.gov.uk/government/publications/contract-management
Stakeholder engagement should be:
- Iterative ? engaging stakeholders is not a one-off activity, it requires ongoing commitment to
ensure all individuals and groups affecting or affected by the contract are kept informed
- Constant ? stakeholder impact, influence and commitment should always be considered
during the contract lifecycle
- Critical ? can be key to he contract?s success or failure
- Inclusive ? an effective method of considering the impact of the contract or potential
contractual changes, problems or issues from all relevant perspectives
- Interconnected ? linked to the contract?s overall objective and values

The diagram below explains how each group on the matrix should be engaged:

Figure 2. Engaging with stakeholders

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Risk management
Just like stakeholder management above, risk management should be more than just a tick box
exercise. It should form a fundamental part of your contract management activities throughout the
lifecycle of the contract. Risk management often happens at different levels; e.g. at contract level
(managing and updating contract risk registers), and at portfolio level (escalation and cross cutting
risks). There should be a clear link between the different levels.

The contract manager will be accountable for regular reviews of the risk register and the individual
risks should be owned by the person best placed to manage and mitigate them. The contract risk
register should provide appropriate visibility through the supply chain and, where appropriate, full
supply chain mapping should be undertaken. The risk register should be regularly reviewed at
department level and jointly with the supplier.

Risks can sometimes be confused with issues. Risks are potential future problems and issues are
current problems. An issue may not have always been a risk, but if a risk materialises it will become
an issue. Good risk management can prevent a risk becoming an issue.

Checklist: early signs of potential risk in contract delivery

Are personnel being replaced in a timely manner if they leave the supplier's organisation?

Are your supplier?s subcontractors being paid on time by your supplier?

Has reporting become delayed or inaccurate?

Are there delays in invoicing or invoicing without required evidence of supplied provision?

Are there repeated miscalculations of deductions?

Is the supplier?s representative repeatedly missing or delaying performance meetings and/or

not answering calls?
Is there an increase in the number or escalations/complaints from end users?

Is KPI performance reported out of sync with client feedback/perception?

Are you reviewing supplier?s market performance regularly and checking media coverage for
adverse or alarming news?

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Risk categories
More information on these are included in the online learning modules.

Compliance
risk

Delivery Reputational
risk risk

Financial
risk

Strategic Political
risk risk

Health &
safety risk

Information
& security Integration
risk risk

Figure 3. Risk categories

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Design and ongoing development
As someone responsible for managing a contract, you have a central role to play in ensuring that the
business need is reflected in the requirement. It is critical at this stage that the business need is
accurately reflected in the contract specification so that delivering against the contract will deliver the
overall desired outcome or policy objective.
Take time to consult with colleagues and other stakeholders to ensure that the specification and
overall contract are well informed by lessons learned from previous experience - good and bad. Don?t
forget to gather feedback from users of the service if appropriate.

Business Case
A robust business case must be clear on the resources required to ensure that the contract can be
well managed. This is the stage to ensure that the appropriate contract management resource is
included in the business case and supported by the approved budget.

Your role in the business case is to:

- Ensure it includes an accurate assessment of the capacity and capability needed to manage
the contract and ensure Authority obligations are met; i.e. is it anticipated to be a gold, silver or
bronze contract? Should the individual be accredited at foundation, practitioner or expert
level?
- Use all available data to validate the assumptions you make
- Use existing insight from records from previous contracts and/or your knowledge of suppliers
including: knowledge of the suppliers?behaviours and motivations; performance of your
current supplier compared to any other suppliers on the market; key risks you have
encountered in existing contracts; insight from customer satisfaction surveys; KPI and
performance records; and your thoughts and justification on whether the contract provided
value for money

Your understanding of the business need is critical to ensure it translates correctly into the
specification and performance management elements of the contract.

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Checklist: Business Case

Have you ensured the business need is reflected in the requirement?

Have you spent time with operational colleagues to understand how services to be
delivered will be used in day-to-day activities?
Have you translated the key activities into the contract?

Have you consulted with commercial colleagues?

Have you ensured KPIs1 are embedded in the contract?

Have you considered different payments options; e.g. payment by results? Have you
modelled these against different scenarios?
Have you built in lessons learned (both successes and failures) from previous or similar
contracts?

Have you used your understanding of the relevant market for critical insight?

Have you done an initial tiering of the contract using the contract tiering tool to understand
the governance mechanisms that will apply and associated resource that will need to be
included in the business case?

You should also be aware of key legislation you are

required to comply with, including:
- The Supplier of Code of Conduct

! - The Modern Slavery Act

- The Public Services (Social Values Act)
- GDPR
- Prompt Payment

These may need to be considered when writing the specification and evaluating bids, but most
importantly for the contract manager during contract delivery.

Contact the commercial team if you need support to understand these better.

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A key element of contract management is the Have you done a preliminary stakeholder
proactive identification and management of map and consulted appropriately on the scope
risk. Have you established a risk register for of the contract and supporting business case?
the project? Do you have mitigation actions in Do you have a plan of how to engage with
place where identified? your stakeholders?

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Procurement and Mobilisation
Procurement process
If the supplier of the contract you are currently managing is bidding for the new contract, you should
ensure the segregation of your day-to-day management duties of the existing contract from your
involvement in the procurement activity.
You should ensure the incumbent supplier:
- Is not involved in any discussions or meetings relating to the new procurement ? this extends
to not discussing the procurement with colleagues if suppliers are in earshot
- Cannot access data or information relating to the new procurement that has not been shared
with all tenderers.
Procurement regulations apply to the spend of public money. All procurements must comply with the
principles of transparency, equal treatment and non-discrimination, proportionality and mutual
recognition. The threshold for regulations dictate the procurement route and timeline that will apply.
Consult your commercial representative very early in your thinking to understand the best option
for what you?re trying to achieve and the timings that apply. These could be longer than you may think
and are legislative timelines that cannot be changed at department level.

When working with the commercial team:

Do Don't

Provide valuable insights into bidders and the Contact the supplier and ask for a ?no
general market that are relevant to the commitment discussion?about contract
procurement planning

Support bidder evaluation and, where relevant and Contact the supplier and ask for a meeting to
under the guidance of the Commercial team, get a head start
support supplier feedback and debriefings during
the process

Ensure the contracted service obligations meet Challenge the procurement team to complete
the business need and that the contract is clear the process early
and manageable
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Mobilisation of contract

Where possible, start this well before the contract is awarded and think about how you will ensure
business continuity if transitioning from one supplier to another.
You will need to put in place a contract management plan which will contain all the crucial
information about how this contract will be managed.

Checklist: Mobilisation phase tasks

Have you established a mobilisation plan to confirm what is required to get the
contract up and running?
Have you set aside time and resource to sufficiently plan and prepare?
Have you set realistic timescales and milestones?
Have you established governance processes and reporting arrangements?
Have you tracked deliverability of mobilisation obligations to ensure they are
documented and understood and risks are assessed early?
Have you made sure that any potential re-procurement (however far away) is included
on the procurement pipeline?
Have you populated a contract management plan?

Mobilisation planning

Key reference documents Key activities

Business case Activate stakeholder engagement plan
Contract Set up governance and reporting mechanisms

Risk register Set up risk log

Budget details Set up change log
Supplier's resourcing plan Establish and document your supplier and
management relationship management process
Transition or exit plan Set up payment process

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 The mobilisation phase provides an opportunity for both parties to gain a
mutual understanding of the contractual terms and obligations including
the performance and reporting requirements. However, it is not an

! opportunity to renegotiate contractual obligations. Be careful that any

conversations or email exchanges you have with a supplier do not
inadvertently contradict one of the supplier?s obligations; e.g. giving your
approval for them to miss a key milestone.

Mobilisation phase considerations

- Have you clearly understood all of the contract terms especially where they refer to an
authority obligation? If not speak to your commercial colleagues.
- Are you clear on how and when payment will be made and what will trigger those payments?
What evidence you need from the supplier before you make that payment?

Putting together the contract management plan is the best way for you to familiarise yourself with the
detail of the contract. Consult with your commercial colleagues if you need support to understand any
aspect of the full contract.

Contingency planning for delayed or failed Remember to revisit your stakeholder map
mobilisation and set up your engagement channels and
processes.
What options do you have if tenders come in
above budget?

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Ongoing contract management
The key to managing a contract well is keeping on top of all the contract management activities
and maintaining good quality records.

Act ivit ies

These include managing performance, managing risk, reporting to stakeholder and governance
groups, receipting the goods or services and paying invoices in a timely manner. Consider using
the con t r act m an agem en t sch edu ler to keep track of what needs to happen, by whom and
when.

Recor ds an d Syst em s
Ensure that all records are filed in the agreed central area so can be accessed by other
appropriate colleagues if necessary and that key information/documents are not ?lost?as people
move roles in the future. Managing contracts using an electronic system is an efficient way to
automate processes, record performance, benchmark similar contracts and measure a supplier ?s
performance across several contracts.

The records can be categorised under 3 key headings:

Operational performan ce Outcomes and benefits realisation

Set up and delivery records Value for money tracking to ensure contract is
delivering against the envisaged policy outcomes
KPI and SLA performance
Using the benchmarking clauses in the contract
Risk register to ensure you continue to get the appropriate
Change control record price

Actions and meetings of contract governance Financial performance

meetings Contract budget monitor
Customer satisfaction settings Monitoring spend against budget
Copies of all correspondence including email Regular review of suppliers financial standing

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Bu sin ess con t in u it y m an agem en t

Business continuity plans should be part of the contract management process.

You should consider the following:
- Who is responsible for creating the plan, the timescales to do so, and how it is regularly
reviewed, updated and tested as the contract progresses
- The circumstances when the plan is invoked and the governance process that is used to
manage its delivery
- The roles and responsibilities of individuals within the department and the supplier(s)

M an agin g dispu t es

If you think you may be heading into a dispute situation your first step is to talk to your commercial
and legal colleagues. It is crucial to maintain records and audit trails of the issues and your interaction
with the supplier as these may be relied upon to resolve the dispute.
Key questions:
- Is there a RACI for the contract which clearly shows who is responsible and/or accountable for
all key activities?
- Are you clear on how to deal with performance issues? Will you invoke a service credit or ask
for equivalent value from an additional service element? Remember to record any agreed
changes in a change control notice and in the change log.

Do not be tempted to ?let the supplier off?any failures to deliver against any
part of the contract, however insignificant they may seem. This could set a
precedent for future failures in performance. Any performance issues

! should be recorded in the reporting suite and discussed at the

appropriate governance meeting with ensuing action also clearly noted.
Make sure you are clear on and are delivering against all the Authority
obligations otherwise the supplier may use this to mitigate any
underperformance on their part

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Review the business continuity Make sure that the recipients of the Any material changes,
plan for the contract on a goods/services continue to be happy whether or not they have a
regular basis. This ensures with what is being delivered under financial implication on the
that it is up to date and the contract. If it is not delivering contract must be recorded in
accurate in the event that you against expectations, is performance a formal change control
need to use it. management of the supplier required notice.
or change control to alter the scope
of the contract?

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Exit and transition
For larger contracts you should begin planning for exit about 12-18 months before contract is due to
end. A draft exit plan should be written at the start of the contract (or even at the award stage) and
reviewed regularly (at least annually).
If you are in a situation where the services provided by an incumbent supplier are being re-competed,
remember the do?s and don?ts in the Procurement and Mobilisation section.

Plan well for exit and remember to:

- Allow sufficient time and resource for an orderly exit
- Ensure you document lessons learned
- Ensure key stakeholders are kept up to date with what?s happening
- Maintain business continuity of services during exit or transition phase
- Ensure any records are stored centrally and can be accessed as appropriate when those who
worked on the contract leave the team.

Will sufficient resource be maintained Make sure that all the stakeholders in the contract are
by all parties for the contract to ensure aware of what is happening during contract exit or
that exit or transition can be carried out transition and the impact on them.
effectively?
How will you retain resource on the
contract?
What plans do you have if people leave
the team(s) before the final activities It is difficult to entirely anticipate all exit activities at the
have been undertaken? start of the contract. It is likely that the exit plan will need
to be enhanced and updated, possibly with financial
Has all the data been returned in line considerations. Ensure that these are formally recorded
with the contract requirements? in the change log and through a contract change notice.

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Change control
Change control is important to consider throughout the contract management lifecycle. Nothing
should be agreed unless it is done so through a contract change notice and recorded in the change
control log.

Types of change
Some change can be predicted and allowed for in the contract; e.g. variation in staffing levels for
events and/or changes in line with inflation. In these situations, a formal change control process
should still be used to track spend and ensure the contract is kept up to date, providing a formal audit
trail of decisions taken. The change procedure should still be followed even for unforeseen changes.

Many changes are less obvious. Some things which you agree to will constitute
a change and should be included into a formal process; e.g. delay to a
milestone, easement or suspension of KPI reporting for 3 months. Even where
! there is no financial implication to an agreed change, a formal change control
notice should be issued to record the change.
The changes need to be mutually agreed by both parties unless otherwise stated in the
contract. If the authority wants a change, you may need to pay additional money to the
supplier to explore the cost implications of that change or agree to change other obligations
under the contract in lieu of additional money. Be aware of any interdependencies in the
contract and how a change to one part could affect other parts of the contract.

Change control management systems

Change control should ensure that:
- There is an audit trail of all the changes made to the contract for audit and continuity /
handover purposes
- Changes and related costs are authorised by all relevant parties, prior to implementation
- Changes are clear and understood in the same way between supplier and buyer
- The contract is fit for purpose, up to date and represents the real, present situation

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 - Changes represent value for money and are consistent with the original contract and current
best practice
- Changes comply with all relevant public regulations
- The additive effect of multiple changes can quickly be assessed and fit within the terms
outlined in the original OJEU notice. If the change is in excess of 10% of the anticipated value
of the contract, or deviates from the original scope of supply, the contracting entity may
become subject to legal challenge. If you are unsure or require support, please consult your
Commercial or Legal representative.
- All changes must be logged in the change control register.

Key considerations before change is signed off for implementation

No change should be signed off for implementation without review of its financial and contractual
implications. It may be useful to consider the following:
- Whether the change presents any duplication or contradiction with existing contract provisions
- Whether supplier caveats in respect of the cost of change may result in unbudgeted future
cost increases
- If value for money is clear and supplier costs are justified
- If the change was driven by the need for savings, check that the costs of implementation do
not exceed operational savings achieved
- Whether the change alters the supplier/Authority risk balance and if so, if this is reflected in the
price
- Whether the new provisions covered by the change contain any ambiguities

Checklist: internal governance to sign off change control

Have you kept within your own delegation of authority and ensured finance, legal,
commercial and project management are all included in the process as required?
Have you ensured all necessary stakeholders are informed?
When escalating, have you ensured that the designated senior stakeholders have signed
off the change?
Have you ensured the correct notices are circulated so the contract can be managed
effectively?
Have you ensured that all documentation is completed correctly and that the contract is
updated for audit trail purposes?
Have you been open with the supplier about your process and where things are within the
chain? Your supplier will also have to adhere to their own processes.
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The dos and don'ts of change control

Do Don't

Keep all change records carefully and ensure they Be persuaded to implement a change without
are retrievable by others change control just because prices aren't
affected
Work closely with the supplier ? the benefit of Make shortcuts in the process - your
change management is two-way successors and colleagues need to be able to
easily follow what you have done
Keep an updated version of the contract showing Be afraid to insist on a systematic approach to
the effect of changes to the original contents ? change
version control should be used on all key
documents
Ensure delivery, legal, finance and commercial When dealing with your supplier, don't mislead
colleagues are part of the process or make premature promisies around change

Be aware of any impact that the change may have Agree to make changes on the phone or via
on other suppliers' ability to deliver email even if you think they are minor

Have you considered the impact of the Have all the relevant stakeholders been
proposed change in relation to other elements consulted on the proposed changes and
of the contract? agreed to them? Refer to your stakeholder
map.
Is the reason for this change a sign that there
may be problems ahead? What insight do you
have from this change? A missed milestone
could indicate under resourcing by the
supplier. Late payments could lead to financial
risks.
Have you reviewed and updated your risk
register accordingly?
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Resources and references
Central resources to support ongoing development:

Contract Management Best Practice Guide: Knowledge Hub

Connect digitally with colleagues and experts within Contract Management, share knowledge,
insight and best practice, learn from experiences and inspire innovation and new ways of
working through the latest guidance and reference materials.
Join the Knowledge hub by visiting: www.khub.net/contract-management

Contract Management Professional Standards

Guidance to help any civil servant who works with third-party suppliers or contracts, even if
this is only a small part of your role by providing the complete Contract Management
Standards required to manage Bronze, Silver or Gold contracts.
Click here to download the Standards

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[email protected]

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