| Synopsis: |
This National Audit Office (NAO) report, "Central Government's Management of Service Contracts (HC 65)", examines how well central government organisations are managing their service contracts, assessed against the good practice framework for contract management. A further examination was done into the effectiveness of the Office of Government Commerce (OGC) in supporting central government to improve contract management. The NAO has focused on contracts for information and communication technology, facilities management and business process outsourcing, where the contract had been signed and the service was up and running. In the 2007-08 period, central government spent over GBP 12 billion on service contracts primarily in the areas of information and communications technology, facilities management and business process outsourcing. The NAO estimates that, in total, GBP 240 million was spent on managing service contracts in the period 2007-08. Delivery of public services, protection against service failure and achievement of value for money are all dependent on effective contract management.The NAO has set out a number of findings and recommendations, including: contract management is not always accorded the priority it deserves; less than half the organisations surveyed had an individual with overall responsibility for contract management; some contracts had taken several years before a proper system of management was actually in place, including resources and performance measures; one-quarter of commercial directors/heads of procurement rated the level of resources allocated to contract management as poor; and, central government do not routinely test their service contracts and good practice risk management practices are not being consistently applied. For the Office of Government Commerce the NAO found that: limited guidance is available on contract management; that central government organisations identified a need for better training for their contract managers; that no cross-government contract management community exists; and, that monitoring and managing major suppliers had focused mainly on the IT sector. |