☛ Want the latest procurement and supply chain news delivered straight to your inbox? Sign up for the Supply Management Daily
4 September 2014 | Will Green
The procurement profession has traditionally had a “low status” in the civil service and has “lacked the sway over colleagues to implement good practice”, according to a report.
The National Audit Office (NAO) said the government “fails to recognise the value of contract management” and “it is doubtful that the government can improve its capability to be able to have the best contract managers on all its contracts”.
In Transforming government’s contract management the NAO said current reforms were “going in the right direction” but there is “a lot still to be worked out”.
“Too often contract management has been seen as delivering the deal that was agreed when the contract was signed. This has meant that contract management has been seen as a way to avoid things going wrong, rather than unlocking value,” said the report.
“Traditionally, the procurement profession has had a low status in the civil service, while contract management has been seen as low status within the procurement profession.
“The profession has lacked the sway over colleagues to implement good practice and struggled to attract the best talent and skills.”
The NAO said 60 contracts had been reviewed by the government for overbilling, following problems with Serco and G4S, and 34 had “issues with billing to some extent” including over and under-billing. “It is likely that there is further overbilling in other contracts across government,” said the report.
Amyas Morse, head of the NAO, said: “For several decades, governments have been increasing their use of contracts with the private sector to provide goods and services. This has produced successes but also thrown up major new challenges, which are not easy to surmount.
“Not the least of these is the need to build up the commercial skills of contract management staff, both in departments and in the centre, and enhance the status and profile of their role.
“Current reforms are going in the right direction and government is taking the issue seriously. There is, however, much to do, and the acid test will be whether the resources and effort needed for sustained improvement are carried through into the future performance of the departments in procuring and managing contracts.”
The NAO has produced a separate report into contract management in the Ministry of Justice and the Home Office, comparing reforms that have taken place in the wake of the scandals with G4S and Serco, which have seen the firms pay the government £179.4 million.
A Cabinet Office spokesperson said: “The NAO acknowledge our work to overhaul government’s commercial activities which saved taxpayers £5.4billion 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."
Jim Bligh, head of public services policy at the CBI, said: “The NAO is right to highlight that the government sometimes sees contract management as an afterthought, focusing too much on getting the deal signed and too little on what will happen when the ink dries.
“The government has a sensible programme of commercial reform but progress is too slow.”