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Executive Summary

These guidelines are for departments and Crown entities as they manage their contracting and other funding arrangements with non Government Organisations (NGOs). The guidelines are aimed at contracting for the provision of services (“outputs”) with NGOs, or otherwise providing funding to NGOs, not for the routine purchase of inputs.

The guidelines are to apply to contracting relationships with for-profit organisations as well as not-for-profit organisations, but with a particular emphasis on relationships with not-for-profit organisations. The Government has expressed a clear wish for a good working relationship with the community and voluntary sector.[1] These guidelines are intended, among other things, to assist building this good relationship.

Contracting or funding arrangements can take a number of forms:

  • either full or partial funding of the agreed services;
  • entitlements attached to the user of a service;
  • funding on the basis of outcomes achieved;
  • grants (funding provided so long as certain conditions are met); or
  • full or partial devolution of decisions on the allocation and use of funds to a community organisation.

This guide is intended to provide assistance to Government agencies in relation to all of these contracting or funding relationships. NGOs may also find it a useful reference. The term “contracting” is used generally throughout, although in some contexts other forms of agreement may be involved.

Principles of Good Contract Management

A number of principles underpin these guidelines:

  • Services purchased through contracts and other types of funding relationships should contribute to the achievement of Government outcomes and objectives. Contracting should reflect the needs of the ultimate users or recipients of the service.
  • Contracts should provide appropriate accountability for public money.
  • Contracts should represent value for the public money.
  • The quality of service delivery will usually be of central importance.
  • The Crown and its organisations should act in good faith.
  • Government agencies should understand the nature of the organisations they and the Crown contract with.

Contracting and funding relationships with the community organisations should be consistent with the relationship the Government seeks to have with the community and voluntary sector. This implies:

  • Recognising the objectives of both parties.
  • Respecting the autonomy of the voluntary sector.
  • Communicating in an open and timely manner.
  • Working constructively together.
  • Recognising the responsibilities of each party to its stakeholders.

Contract Lifecycle

These guidelines cover all aspects of the contract lifecycle:

  1. Planning
  2. Selecting a Provider
  3. Negotiating the Contract
  4. Managing the Contract
  5. Review and Evaluation
  6. Starting Over

An important issue to think about is at which stages the NGOs you deal with should be involved in these processes. In many cases there will be advantages to involving NGOs early in the process, at the planning stages.


  • [1]The Statement of Government Intentions for an Improved Community - Government Relationship (available at
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