Ministry of Justice – improving Contract Management post Serco & G4S

We recently featured the Ministry of Justice (MoJ) staff event where the Serco and G4S issues were discussed in some detail – see our reporting here and here. But that was all backward looking. The event also covered the future plans that the department is putting in place to address the failings and ensure (we hope) that nothing similar will happen again.

Vince Godfrey and Ann Beasley – CPO and CFO respectively for the MoJ – took us through some of the key learnings from the whole episode. For instance, although they had contractual rights to do so, MoJ did not carry out their own verification of suppliers' data. “We need to check what people tell us. Trust is good, checking better”.

It also highlighted that effective contract management (CM) requires a whole range of skills, including deep analytical input, financial skills, etc. Those capabilities are now being brought into the management of key contracts.

Godfrey also pointed out that the audit that was undertaken of all the department’s key contracts after the Serco and G4S issues came to light highlighted that there was much good work going on – contract management of the private prisons contracts was very good, for instance. But, as he said, “we don’t want to waste a good crisis”. This will be seen as the moment when the civil service really started to take CM seriously. And we shouldn’t see public officials as a soft touch – “our people were very impressive in all the interactions with the private sector”.

Jim Rawlings then explained in more detail the new CM programme. Godfrey will have a new job title – Commercial and Contract Management Director.  An extensive improvement programme is under way,  reporting into Beasley, to install good CM practices. Senior internal and external stakeholders are involved, including the National Audit Office and Cabinet Office. The programme is based on the NAO Good Practice Guide from 2008*, although the MoJ will add further content around “termination and sourcing”, Rawlings said.

All owners of major contracts with a value of over £10 million have now provided assurance that key measures are in place - that includes risk assessments, escalation procedures, payment authorisation and so on. A contract management plan template has been given to these owners, and the Programme Board continues to monitor process.

This is all a partnership between business owners and the Commercial and Contract Management function (CCM).  Delegated authorities flow through Ann to Vincent and then to business budget holders -  if you don’t have it, you are not allowed to commit on behalf of the department. But business and CCM both have key roles to play. All contracts must have performance management indicators, to ensure end to end service delivery is accurately and comprehensively measured. And “data management assurance” will include channels such as customer surveys and mystery shoppers.

A Commercial and Contract Governance Board is also being developed to provide end to end contract governance, including to oversee assurance on business cases, approve sourcing plans, contracts, contract audit plans and outputs. Rawlings and the team are also developing a common lexicon of terms to add to the understanding of the whole subject.

Now all of this needs sufficient resources, so there is much activity in that area, with recruitment, new role descriptions, skills gap analysis, and the department is “procuring a service to provide CM resource”. There is a drive for more professionalism, not just CIPS qualifications but also IACCM (International Association for Commercial and Contract Management) for instance.

It all sounds like a truly impressive CM programme; you will struggle to find an equivalent in many organisations, public or private. Of course the proof is in the implementation and outputs, but the work itself bodes well for the future.

Finally, one comment that stuck with me from the day.  Godfrey and Beasley said they were “proud we did the right thing – the whole issue could have been swept under the carpet”. That’s a good point, and rather than simply criticising public bodies when things go wrong, we should be pleased that problems are opened up to scrutiny. Anyone who has worked in the private sector knows that cock-ups happen there too – but usually never hit the public domain.

And, as Godfrey said, “if something doesn't smell right, challenge it”. Very good advice on which to close.

*It is good to see the work I did with NAO finally getting real attention in government!

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