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Guidelines for Contracting with Non-Government Organisations for Services Sought by the Crown [2003] (2003)

1.8 The Contracting Capability of Government Organisations

A Government agency that has significant contract management responsibilities must treat these as part of its core business, and the staff involved must understand the processes that the department employs to manage contracting or other funding responsibilities. An agency’s contract management system needs to be structured and flexible enough to manage significant shifts in Government policy. Poor quality contract management poses serious risks to the Crown and the agency.

An agency’s contract management is dependent on:

  • The quality of the systems employed:
    • Clear policies and processes for contracting or other funding responsibilities - planning, NGO selection (including tendering), quality assurance, relationship management, contract negotiation and drafting, and monitoring, and internal controls (e.g. one person should not be responsible for all aspects of contract management).
    • Clear ethical standards, which address conflicts of interest and promote required standards of public sector conduct.[6]
    • Adequate recordkeeping policies, practices and systems that enable the creation and maintenance of full and accurate records of agency decision-making and actions.[7]
  • Management capability:
    • An organisational culture committed to high quality contract management.
    • Alignment of the management and staff with the objectives of the organisation, including operating within the budget constraints and accountability requirements of the agency.
    • Good relationship management and negotiation skills, tested by reference to results achieved in contracts and relationships.
    • Clear assignment of role and responsibility to managers and staff responsible for contracting, including delegation of authority, such as:
      • The extent of managers’ ability to sign contracts.
      • The areas in which managers have discretion.
      • Which decisions are to be taken regionally and which nationally.
  • Human resource capability:
    • Suitably qualified and experienced staff.
    • Access to specialist expertise, including legal, financial, contracting, policy, and cultural expertise, as well as expertise about the community and voluntary sector.
    • Training and guidance for staff, including training in dealing with community organisations, or in dealing with Maori or Pacific Island organisations where that is relevant.
    • A good understanding of the NGOs that the agency contracts with, and the people and communities to which services are provided.

Government agencies must keep their contract management under review. This should include:

  • Having a clear understanding of the cost of contract management.
  • Reviewing contract management against departmental and central guidelines.
  • Seeking and taking account of feedback from NGOs and users.
  • Benchmarking.


  • [6]For example the New Zealand Public Service Code of Conduct (available from
  • [7]Advice and guidance on recordkeeping practice and standards are available from Archives New Zealand (
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