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4.2 Ongoing Relationship Management

Managing the contract is part of ongoing relationship management with the NGO delivering the service or otherwise in receipt of Government money. The contract will record the basic expectations each party has of the other, and where the relationship is working well, there will usually be no need to enforce the terms of the contract. The NGO is entitled to be informed in a timely manner of any concerns the Government agency has about performance under the contract, and should be encouraged to provide feedback on the Government agency’s performance.

The need for on-going relationship management is often paramount. Government agencies should actively ensure they have sufficient understanding of the culture and language of service recipients and the NGOs they contract with to ensure effective service provision. A good ongoing relationship and successful contract will be aided by an understanding at the outset by both agencies and NGOs of each other’s expectations of the way the relationship will be managed. It may be sensible to make a senior contact point known to NGO’s to help resolve difficulties that may arise. Government agencies will often benefit from indicating a point of contact with them to assist in resolving contracting matters.

4.3 Payment

Where practicable, payments should be aligned with expected deliverables. However, this is not always possible or desirable. In some circumstances it may be appropriate to have all or the majority of payment made up front (e.g capacity/capability building, where contract is for relatively small amounts of money or where risk is assessed to be lower), or to pay in instalments - depending on the total amount of money involved. When structuring payments, and in particular, instalment payments, agencies should balance the need to ensure that the NGO has funding so that it can deliver the service sought against the obligation to provide accountability for public money.

Full payment should not be made until final reports or information required to be provided under the terms of the contract or funding arrangement have been received and reviewed. Government agencies should not, however, use their own poor planning as an excuse to withhold payments from NGOs. An NGO satisfying its end of the contractual arrangement is entitled to be paid on time, in accordance with the payment schedule set out in its contract. Failure to pay in accordance with the payment schedule when the NGO has met the terms of the contract may be a breach of the contract. Failure to pay may threaten the ability of the NGO to continue to deliver the service.

The Government agency will also need to consider in advance the implications for payment of any failure on the part of the NGO to meet the terms of the contract (e.g holding over a reasonable percentage of a payment until the agreed terms are met).

No payment should be made before a contract has been signed.

If there are delays in signing a contract which compromise the delivery of an important service, then the Government purchaser should consider entering into a short term contract until the contract is signed (this could include extending an existing contract for a short period).

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