Procurement Reform - what are your new contract management obligations?

We’re focusing on contract management for our next Procurement Reform update. The Act provides you with more power to manage contractor performance – but with this power also comes more responsibilities. From 28 October, Contracting Authorities (CAs) will now have additional notices to post across a contract’s lifetime, as well as new rights to terminate contracts for poor-performance.   

We’ve caught up with one of our Procurement Partners, Morris Williams, to run thorough the changes and what you can do to prepare ahead of October.   

Firstly, what are the key changes?  

The new regulations introduce new notices designed to support organisations with their contract management. You'll need to share them when relevant to your contracts and at different stages across its lifetime.  

1. Payments Compliance Notice (Section 69) - You'll need to publish this notice every six months when you've made a payment under a public contract, or an invoice owed by you becomes payable. It's designed to ensure that you're paying contractors within 30 days and that public contracts are well managed. 

2. Contract Performance Notice (Section 71) - This is only mandatory for contracts over £5 million. Here you're required to issue yearly updates on at least 3 KPI's, or if a breach/failure to perform has occurred. It's been introduced to make contract performance more transparent.  Here we've included the KPI ratings and their descriptions: 

Rating

Description

Good

Performance is meeting or exceeds the KPIs

Approaching Target

Performance is close to meeting the KPIs

Requires Improvement

Performance is below the KPIs

Inadequate

Performance is significantly below the KPIs

Other

Performance cannot be described as set out above

3. Contract Termination Notice (Section 80) - You'll need to post this notice within 30 days of a contract ending, or being terminated. It'll need to include detail on why it's being terminated (including any break/failure), the estimated contract value and the date of termination.  4. Contract Change Notice (Section 75) - You'll need to post this before changing any public contract. It will need to explain what's changing, its impact on the contract and why you've made the change. This doesn't apply if the change:

• increases or decreases the estimated contract value for goods or services contracts by 10% or less, or for works contracts by 15% or less, or the change
• increases or decreases the contract term by 10% or less of the maximum term provided for an award. 

5. Contract Details Notice - in addition to the current Contract Award Notice, Contracting Authorities must share a redacted copy of the contract for all contracts over £5million. Here commercially sensitive information can be withheld.  

What can you do to prepare for the changes?  You should look at agreeing an internal approach to managing these contracts under the new regulations - and develop procedures and supporting documentation to match. It's important that you check your contract database to understand which contracts will fall under the old regulations, and which ones will fall under the new ones.  You'll then need to train your colleagues and engage with your stakeholders early. Contract Managers and finance colleagues need to have the right resources to understand their role and the key elements of the contract - including the specification.  

Lastly, what will SEC be doing to support customers with the change?  We'll always keep you compliant when using our frameworks. And our support doesn't have to end when we finish the procurement process - our technical team can help you with your pre-start meetings and ongoing contract management if you need it. We can help set expectations for contractors from the start, so they know what will be reported on and when.  

Interested in learning more about Procurement Reform? We’re publishing regular news posts on our website. View them here: Latest Updates on UK Procurement Reform – SouthEastConsortium  Alternatively, subscribe to our email newsletters here.