Define risks and responsibilities for contract management success

23 March 2012

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23 March 2012 | Angeline Albert

You must define any risks and establish who has responsibility for them for contract management to be successful, the person responsible for managing the deal for the digital TV switchover support scheme told SM.

“Making bidders aware of risks is vital to the success of contract management,” said Chris Taylor, contracts manager for the BBC’s Switchover Help Scheme. “From the outset, procurement must clearly define what the risks are and who is responsible for what risk.”

The help scheme was established to support older and disabled people in the UK change one of their television sets to digital before their local area switches to digital broadcasting. The contract to provide this service was awarded to Eaga in 2008 – who were acquired by Carillion in 2011 and are now known as Carillion Energy Services (CES). The supplier must make eligible people aware of the scheme, install digital equipment in homes and manage a customer call centre and provide an aftercare service.

The digital TV switchover has been taking place on fixed dates on a region-by-region basis, and finishes with Northern Ireland this October.

Taylor explained CES bore the responsibility for getting its job right first time, including an expectation of no aftercare calls that required an engineer to fix poor installation work. This carried some financial risk to the supplier, with CES bearing the cost of a call-out should an engineer be required to fix poor work.

Although around £600 million from the BBC licence fee was ring-fenced for the scheme, the use of the competitive dialogue tender process by the BBC shaved more than £100 million from the programme’s cost.

But Taylor added: “Cost saving is not the primary aim. The aim is to ensure take up was at an appropriate level to ensure eligible people requiring assistance get it from us.”

Performance analysis conducted by the contract management team included analysing aftercare calls to try to identify what could be done to reduce the risk of aftercare calls. This resulted in some retraining of engineers.

To help CES raise awareness about the scheme, staff are encouraged to talk on local radio stations. In reference to regional switchover challenges, Taylor added: “We found word of mouth worked well in close knit Scottish villages but not London."

London switches to digital next month. This will be the biggest single regional switch.

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