Senior managers often ‘don’t know what’s going on’ with their departments’ contracts

Senior civil servants often “don’t know what’s going on” with contracts held by their departments and thus spot problems too late, Joshua Reddaway, the National Audit Office’s director for commercial and contracting, has warned.

By Winnie.Agbonlahor

18 Sep 2014

Reddaway, main author of the ‘Cabinet Office: Transforming government’s contract management’ report published earlier this month, told CSW last week that senior managers’ lack of involvement in contract management and progress oversight means that the quality of information about contracts is often very low.

He said that senior managers “have had to react to problems and disputes in contracts when they've arisen rather than knowing what is going on beforehand. And because they don’t know what’s going on beforehand, they haven’t asked for information.”

Managers’ failure to request information on new and existing contracts, he added, means that “the level of information available isn’t very good.”

With changes being made to contracts throughout their lifetime – sometimes via informal channels – it is often tricky to “actually know what the current version of the contract is”.

Reddaway said that failure by departments to keep track of changes to contracts has also been due to the design of IT systems, which have “been organised around payments, rather than management of contracts”.

While he added that “government is probably not going to pay enough or recruit enough people to ever be in a position to out-negotiate every single one of their suppliers”, more needs to be done to raise commercial skills levels.

The NAO has found that “those responsible for contracts aren’t always aware that they are”, Reddaway said, calling for “commercial training and support across the civil service”.

He said a lot of criticism about government’s approach to contract management is aimed at senior civil servants, but added that “the future senior civil servants are today’s non-senior civil servants, so as we’re moving towards a culture of commissioning in the civil service, this requires everyone to be thinking about these issues. and I would expect a generalist career in the civil service to have some exposure to these [commissioning] issues.”

Asked whether he believes this move is over-due, considering that a substantial proportion of government services are now being procured rather than provided directly, Reddaway said that the NAO has in its report been “as strongly-worded as it ever possible could be. We have said that the value of contract management is not understood; we think that government officials don’t understand why and how to manage contracts; we think that managers have not adopted a commissioning role; we say in [the report] that successive governments have pursued this idea of commissioning, the idea of using private providers to deliver policy aims, but departments have not evolved along with that move and the way departments are managed has not changed enough.”

While Reddaway said that government should have started to tackle its contract management problems “at the same time as commissioning started, which we date back to the early 1990s”, he also said that the NAO has “never seen the level of engagement from the top of government we're getting on this now and that's why we're actually quite hopeful.”

A Cabinet Office spokesperson said: “The NAO acknowledge our work to overhaul government’s commercial activities which saved taxpayers £5.4bn last year alone, against a 2009-10 baseline.

“Compared to 2010, when there was no central grip on procurement, we are now taking a hard-hitting business-like approach to managing contracts with suppliers.”

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