At the end of last year, the UK’s National Audit Office issued a very useful document titled “Commercial and contract management: insights and emerging best practice”. We did provide an initial overview of it here, and now we are into a more detailed review of its content and findings. For each of the 20 areas the NAO has covered, we will look at their content and then give any additional analysis or thoughts we would add to the mix.
We are on the home straight now and NAO insights 17 and 18 come under the wider heading of “Contract Lifecycle”. Today, we will look at number 18 – “Work towards business-as-usual requirements”.
That is one of the least intuitively obvious of the insights, but what the NAO means here is really all about the importance of mobilisation, the transition into the live running of the contract from the procurement and contracting phase. “This phase includes supporting a smooth transition; time to set up good practice; and identifying potential contractual changes, problems and risks that may have a subsequent impact”.
Not getting this right clearly sets a negative tone for the rest of the contract, and government’s commercial operating standards recognise this as a specific phase in the process. Much of this plays back to previously discussed issues such as specification – a lack of clear specification of roles and responsibilities for example creates uncertainties and makes effective mobilisation more difficult.
The guidance recommends a sensible four-stage approach:
- Establish a mobilisation plan
- Set aside time and resources
- Use effective processes
- Monitor the results
The case studies quoted here include our old favourite, the disastrous UnitingCare health contract in Cambridge that failed, one reason being “insufficient amount of transformation funding and the short mobilisation period allowed”. (There were other reasons too, it should be said!)
Another programme we’ve covered and criticised in the past is also quoted; “The Cabinet Office’s shared service centres programme (2016 report) did not secure sufficient early support from departments, which felt insufficiently involved in appointing suppliers and designing new systems. Failing to get an early agreed design contributed to delays in implementing the programme”.
But for a bit of balance, the guidance praises the Department for Work & Pensions and suppliers “on the transition of health assessment provision from one supplier to another. Their success was down to key factors including recognising the challenges of a tight timetable (four months) and seconding staff to support transition; tripartite governance arrangements; and shared goals and reporting arrangements”.
Public Spend Forum Comments
Not much to argue with here in terms of the advice and highlighting the importance of this phase, although there is a slightly contradictory tone to some of the remarks. NAO says “The early success of a contract depends on how quickly and efficiently government gets the contract up and running”. Yes, that seems clear, however, you might well have a contract that is delayed somewhat in terms of mobilisation but goes on to be successful in delivery terms. The guidance also sees rushing the mobilisation as a warning indicator in terms of performance.
There is a balance to be struck here, between getting on with a prompt implementation, and making sure everything is in place to make the start of contract delivery successful. I’d rather take a little more time to get things right, but in the real world staff are often up against other imperatives to move quickly. Either the contract must get going or there will be operational failure (which may have serious consequences for the organisation or indeed for citizens) or the politicians have decided it must start NOW (or “before the Party Conference” as I have seen in the past.)
The other point to note is that this factor, whilst important, really reflects on many of the earlier NAO insights. So if everything up to this point, from market engagement through specification development, competition and contracting has gone well, mobilisation is rarely an issue. But this is where previous issues or failures in the lifecycle can really come home to roost and it may become obvious that something was not right about the prior process.