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Chapter 2 – Selecting a Provider

2.1 Suggested Approaches

A key step in contracting is selecting the NGO to deal with. A number of approaches can be adopted:

  • There may be an existing provider that the purchaser has a relationship with.
  • Contract managers should be aware of suitable NGOs in their area.
  • NGOs may take the initiative to suggest services or activities.
  • Information about potential providers may be available from needs assessment or service planning.
  • Ask other Government agencies, local Government, or other bodies.
  • Ask other NGOs, particularly umbrella groups who will have information about NGO providers.
  • Published information such as accreditation or registration.
  • Advertise for expressions of interest.
  • Tenders for services.

The quality of the service or activity being paid for will usually be of central importance in the selection of the NGO.

2.2 Relationships with the Community and Voluntary Sector

A contract with a community organisation will often be part of an ongoing relationship. That relationship may begin before any contract or funding agreement is in place, and may continue in the absence of any such agreement. The relationship may involve more than the service or activity being paid for. It may also mean involving the community organisation in other activities such as policy development, recognising the information and expertise that many community organisations possess. Contract management needs to be thought about as an aspect of relationship management (and vice versa).

NGOs are not simply an extension of the Government. They have their own objectives and interests. NGOs may be involved in activities that the Government does not wish to fund. NGOs, in turn, may only be interested in part of a service that a Government agency wishes to purchase.

Service delivery will be coloured by the NGO’s objectives. This will be part of what is being paid for. These objectives need to be well understood lest they undermine the relationship between the Government agency and the NGO. It is important for Government agencies to ensure NGOs can provide services in a culturally appropriate way to ensure the services will be effective. Mainstream NGOs dealing with particular groups may sometimes need to consider collaborative ventures with iwi/Maori or other community groups.

Government agencies should not try to use the contractual relationship to prevent the NGO commenting on public policy matters, including funding issues. Equally, Government agencies should also be careful to ensure that contracts do not breach public service standards of political neutrality.[8]

To the extent that NGOs receive public money, they are, in turn, accountable for that money. They will also be accountable to their stakeholders and clients.

Government agencies must consider the implications of NGOs’ separate status. They must:

  • Avoid trying to control an NGO’s activities, outside of the contractual rights and obligations.
  • Remember that the NGO will not automatically give priority to the agency’s interests or those of the Crown.


  • [8]Refer to the Political Neutrality Fact Sheets issued by the State Services Commission, (available at
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