Contracting

Governments are the largest consumers in an economy — on average the public sector spends 45-65 percent of their budgets and 13-17 percent of their GDP on procurement.

The effectiveness and efficiency of public sector procurement impacts the scope and quality of public services, as well as ensuring that taxpayers receive 'value for money'. Overall perceptions of performance are not generally favorable, fuelled by media comments that range from 'Corruption is rampant in 60 countries, and the public sector is plagued by bribery, says Transparency International', through to the more general implications of incompetence each time there is a failed, high-profile project.

It often seems popular to criticize those responsible for public procurement; but is it justified? It would be equally easy to select a range of terms or relationship types invented by government agencies and suggest that they are, in fact, a source of significant innovation.

Outside the US, the evidence of well trained resources at any consistent level is far more variable. In the UK, for example, the Office of Government Commerce (OGC) has developed a plethora of policies and guidelines which are broadly followed even if not universally loved. It has also developed creative approaches to contracting — for example, the public-private partnerships (PPPs) that have seen new relationships being formed to tackle major, high cost (and often high risk) projects. But unfortunately success has been mixed and in part the reason for this seems to be that the community at whom these initiatives are directed is extremely fragmented. There is no professional body of contract managers using consistent methods and practices, except in highly sensitive departments with long-term project-based contracting, such as the Ministry of Defence.

Contract Oversight

In order to ensure that contractors supply the government with the goods and services agreed to under the financial terms and programmatic requirements outlined, it is important that the federal government conduct proper oversight of contracts. Good oversight holds contractors accountable; poor oversight often leads to waste, fraud, and abuse of taxpayer dollars. Our Contract Oversight Investigations are aimed at preventing billions of dollars from being wasted and defrauded from the $530 billion annually spent by the government on goods and services.

As projects become increasingly complex, as the range of relationships continues to increase, as the pace of innovation and change increase, government and public sector bodies are being forced to confront their need for increased investment in high quality, well-trained contracts and acquisition professionals. Projects are under way in several of the leading countries to address this issue and to safeguard outcomes. In the process, we may perhaps start to escape the image of bureaucracy and inefficiency, and instead develop a reputation for value and innovation.

Effective Contract Management

Effective contract management can save a company time and money and mitigate risk. Even so, often after companies painstakingly negotiate agreements, they frequently file them away and move on to the next business negotiation without giving them much further thought. Getting control of contracts then can become a fire drill after deadlines are forgotten or when ...