In public procurement, the growing interest in contract management marks a significant shift in the award and performance of public procurement contracts. Historically, public procurement has focused on rigorous award processes, with particular attention paid to the bid selection and award stages. A new trend is emerging, however, which highlights the crucial importance of contract management, not only in the upstream phases, before the tender is published, but also in the phases of steering and monitoring contract performance.
A. Contract management, a lever for improving public procurement contracts
Contract management is a discipline that can add value at every stage of a contract's lifecycle. A contract management approach is relevant to the preparation and planning of the contract, to the negotiation and drafting of the contractual clauses, and to the rigorous monitoring of performance, the anticipation of risks and the handling of any changes.
The contract manager's expertise can therefore prove useful at every stage of the award and performance of a contract, promoting both better use of public money and greater satisfaction for contracting authorities: upstream, through better account being taken of needs, context and issues when drafting tender documents and awarding contracts; and during performance, by tracking and heading off the drift and non-conformities that can punctuate contracts.
B. Contract management, at the crossroads of AMO and legal assistance
While contracts for client-side project ownership support (assistance à maîtrise d'ouvrage, AMO) or for legal assistance are legion, contract management contracts are far rarer, not to say almost non-existent.
Yet, while the discipline may seem to sit between client-side project ownership support (AMO) and legal assistance, contract management differs from AMO in its vision and its focus on contractual optimisation and the monitoring of contractual performance, and from traditional legal assistance in its operational nature and its focus on optimising contractual performance and managing risk.
C. Rare contracts despite a growing need
As we discussed in the previous paragraph, the term "contract management" is not yet part of the vocabulary and practice of most public buyers. Recognition of its importance and its added value is gaining ground, however, not least because of the place contract management has taken in the private sector.
Public bodies and contracting authorities are increasingly aware that awarding a contract is not limited to drafting it and awarding it, but calls for active, ongoing management, as well as a contractual dimension, if it is to succeed.
D. Why should public buyers take an interest in contract management?
As contract management consultants, we inevitably hold a biased view on the question. That said, trying to keep some semblance of objectivity, here are the main benefits of contract management in public procurement:
- Better use of resources: Better contract management means more efficient use of public resources, whether financial, material or human. Contract management can have a significant impact on the management of interfaces, on reducing duplication and on the other difficulties inherent in the transition between an outgoing and an incoming supplier.
- Reduced risk: Anticipating and proactively managing contractual risks limits situations of conflict, and even litigation.
- Better performance: Rigorous contract monitoring guarantees better quality of service and adherence to deadlines.
- Transparency and compliance: Effective contract management strengthens transparency and compliance with the laws and regulations applicable to public procurement.
Conclusion
The arrival of contract management in public procurement is a necessary and welcome development, one that would help meet the current and future challenges of performance, transparency and better-managed public procurement contracts. While the road to widespread adoption is still long (as this 2018 article reminds us), the first steps have been taken, heralding a new era in the management of public procurement contracts.