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Chapter 6 - Starting Over

The end of a contract is an important part of the contract management cycle. Government agencies need to consider what to do in the future well before the end of a contract. This requires returning to the planning part of the contract management cycle. There are a number of possible approaches:

  • Renegotiating the contract with the supplier or rolling it over.
  • Selecting another supplier or tendering.
  • Altering the scope of a service.
  • Continuing the service but identifying ways in which the provider could be developed further to enhance or improve service provision.
  • Discontinuing the service.

The decision taken should be informed by:

  • The ongoing relationship with the provider.
  • Any feedback available from the users of the service.
  • Monitoring of the provider’s performance.
  • Evaluation of service or policy.
  • Update of user/recipient needs analysis.
  • Any other information available on value for money (e.g. benchmarking).
  • Legal obligations.
  • Changes to Government policy.
  • Legislative changes.

A decision to discontinue or alter a particular policy, for example, might be taken because it had been successful and was no longer necessary or a priority, or, conversely, because of evidence that it was not effective or represented poor value for money, or because of a change to Government policy. A contract might be put up for tender because:

  • The NGO no longer wanted to carry out the service.
  • Dissatisfaction with the performance of the NGO (this should have been raised with the NGO before a final decision on the contract is made).
  • A desire to test the market.
  • A desire to give other potential providers an opportunity.

A contract might be re-negotiated with the NGO because of:

  • A need to maintain continuity of supply.
  • A long running relationship and satisfactory performance.
  • No other suppliers being available.

The existing provider should be given ample notice of the approach that the Government agency proposes to take and the agency should ensure there has been consultation and communication about it.

Where a contract is to be varied or extended for a future period, the costs of the contract, what has been achieved or delivered to date under the contract, and what still has to be achieved/delivered should be reviewed before progressing. The actual costs of service delivery under a first contract should be checked before establishing the costs of a subsequent contract. A contract should not be rolled over to ensure continuity of supply simply because of poor planning by the Government agency.

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