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Serving the Community By Using the Private Sector

Serving the Community By Using the Private Sector. A User Guide to Contract Management. 15 February 2007. When does contract management begin ?. General impression. After contract award. Good practice. Start from pre-contract stages. Contract management in government outsourcing.

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Serving the Community By Using the Private Sector

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  1. Serving the Community By Using the Private Sector A User Guide to Contract Management 15 February 2007

  2. When does contract management begin ? General impression • After contract award Good practice • Start from pre-contract stages

  3. Contract management in government outsourcing Developing the business case Tendering and selection Managing the contract Market Sounding Exercise • Market interest • Market capability • Business model Develop attractive commercial arrangements Attract the most appropriate contractors

  4. Contract management in government outsourcing Developing the business case Tendering and selection Managing the contract Develop • High quality tender documents • Robust tender evaluation method • Conducive to effective contract management • Select honest and reputable contractors, thus reducing subsequent monitoring and enforcement effort

  5. Contract management in government outsourcing Developing the business case Tendering and selection Managing the contract • Prepare for the transition • Monitor service delivery • Administer the contract • Conduct review and renewal

  6. A User Guide to Contract Management • Collective wisdom 2006 Survey on Government Outsourcing Outsourcing Review

  7. A User Guide to Contract Management • A handy reference for • Outsourcing issues faced by the departments • Best practices • Local and overseas experiences • Assistance

  8. FSTBCM Treasury Memo Memo From ______ Ref. ______ Tel. No. ______ Fax No. ______ Date ______ From ______ Ref. ______ Tel. No. ______ Fax No. ______ Date ______ To ________ (Attn: ________). Your Ref. _____ Date _________ To ________ (Attn: ________). Your Ref. _____ Date _________ ________________________________________________________________________________________________________________________________________________ ________________________________________________________________________________________________________________________________________________ Regulatory framework for outsourcing contracts • Tendering and selection

  9. 2001 2002 2004 2005 2006 Regulatory framework for outsourcing contracts • Mandatory requirements for service contracts (excluding construction services contracts) that rely heavily on deployment of non-skilled workers FC No. 3/2001 Marking scheme to take account of proposed wages and working hours • FC No. 3/2004 Mandatory requirements on tender assessment • Demerit Point System • Conviction records FC No. 4/2006 Tightened mandatory requirements on tender assessment FC No. 5/2004 Mandatory wage level Standard Employment Contract

  10. World Trade Organisation Agreement on Government Procurement Agreement (WTO GPA) Objective : To provide an open and fair competitive environment amongst domestic and foreign contractors

  11. Annex 4 of Appendix 1 Threshold values Compliance with the WTO GPA Challenges : • Difficult to decide whether or not a service tender is governed by WTO GPA

  12. Compliance with the WTO GPA • Balancing competition and compliance with the WTO GPA • Seek advice from the DoJ and other relevant authorities

  13. Outsourcing roles within a department • Ensure good internal departmental communication Division A Division C Headquarters Division D Division B

  14. Outsourcing roles within a department • Between Headquarters and District Offices Headquarters • Establish relevant procurement policy and framework • Advise on best practices • Handle tendering and selection process • Encourage continuous improvement District Offices • Develop business requirements • Monitor the performance of contractors • Provide feedback to Headquarters

  15. Outsourcing roles within a department • Between contract managers and frontline supervisors

  16. Develop high quality tender documentation Three useful guidelines : • Develop relevant and concise service specifications • Observe the golden rules • Incorporate provision for variations

  17. Develop relevant and concise service specifications • Output–based and non-prescriptive • Focusing on key issues • Providing and requesting information for well-defined purpose FOR THE PROVISION OF SERVICES Tender Ref : XX/0032/23 File Ref : AA235672006

  18. Golden rules for drafting tender documents • Know what you want • State clearly the party responsible for a contractual obligation • Think about the worst scenarios • Plan for termination/expiry of contract • Ensure that the provisions are certain and clearly expressed • Apply logical thinking • Ensure consistency throughout the tender document • Do not rely on implied terms • Start with the service specification • Define contract/project management and monitoring schemes

  19. Incorporate Provision for variations • Service scope variations • Continuous improvements

  20. Encourage good practices from contractors • Avoid exploitation of labour • Wage • Maximum working hours • Holidays

  21. Encourage good practices from contractors • Monitoring measures against exploitation of labour • Posting notice • Setting up enquiry/report hotlines • Setting up a central independent investigation team • Conducting selective checks on payroll records • Soliciting employee’s feedback

  22. Encourage good practices from contractors • Balancing the effort to avoid exploitation of labour

  23. Encourage good practices from contractors • Good customer and employee relationships Gauge feedback Customer Relationship Management Staff development

  24. Encourage good practices from contractors • Good behaviour from subcontractors • Self-reporting of operational and management information

  25. Contractor malpractices Awareness Reporting Investigation Training Publications Responsive complaint handling system Formal and secure channels Random checks Independent investigation team Partner with relevant authorities Legal implications with sharing of information Sharing of responsibilities between contract managers and frontline supervisors

  26. Arbitration body Steering Group Service Review Group Dispute resolution • Take appropriate action • Formal approach • Informal approach • Escalation mechanism

  27. Dispute resolution • Alternative dispute resolution approaches • Assisted negotiation • Assisted mediation • Commercial settlement • Arbitration

  28. Dispute resolution • Demerit Point System • Termination and Exit • Legal Actions

  29. ~ Thank You ~

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