NAO Contract Management (part 2) – MoJ and Home Office reviewed

In our previous post, we looked at the National Audit Office (NAO) report on contract management in the UK government. The parallel report from NAO looks more specifically at two departments, Ministry of Justice (MoJ) and the Home Office, and the steps they are taking to improve contract management performance.

MoJ had major issues with their prisoner monitoring contracts, and we reported here on the steps they are taking to improve matters. We were quite impressed by their actions, so it was interesting to see that NAO largely agreed with us that the department is moving very much in the right direction.

Overall, the MoJ started from a significantly weaker position than the Home Office, finding far greater overbilling and areas of weak contract ownership. But the MoJ has responded promptly with a more comprehensive improvement plan with the potential to transform how it manages its contracts if it sustains its current commitment. Other departments can learn from it. There is now a desire and impetus for change in both departments upon which they must capitalize before the end of 2015”.

Whilst MoJ has the “more comprehensive improvement plan”, the detail of the report suggests that each department has something to learn from the other. So going through the major recommendations from the NAO:

1.             “Both departments must maintain their current impetus to improve contract management so that good practice becomes business as usual”. The Home Office is stronger on strategic relationship management, but MoJ is better on compliance with good practice – their contract governance board is playing a useful role here. So each organisation can learn from the other.

2.            “Departments must be able to rely on contractor information” and reporting in areas such as costs and performance without too much checking. So it is important to specify that in the contract and include “stringent penalty clauses for misreporting”. Clearly, this is absolutely the case. It would be nice to think that suppliers will report accurately without any incentives to do so, but unfortunately the evidence suggests this is not the case!

3.            Both departments need a balanced scorecard for each major contract, containing performance, cost and risk information. And the Home Office should replicate aspects of the Ministry of Justice’s increased data analytics capability, developing “balanced scorecards for all major contracts, and creating specific analyst roles within contract management teams”.

4.            Both departments need to ensure a joined up approach to contract management between commercial, legal and finance specialists, and operations managers. The Home Office should learn from the Ministry of Justice’s multi‑disciplinary team model. In general, the report suggests that MoJ have grasped the need for this cross-functional approach to contract management, whereas activities are somewhat more silo-ed in the Home Office.

5.            Both departments should carry out periodic skills audits to identify levels of commercial and contract management skills across their organizations. The Home Office should extend its skills audit beyond its commercial directorate to assess training needs for all contract management staff. The Ministry of Justice should learn from the Home Office’s approach to assessing skills. It has begun training selected staff before auditing skill levels among contract management staff generally.

So a fairly positive report for both departments, and the MoJ must be pleased to see their work acknowledged after the torrid time they had with the prisoner monitoring contracts. And, just like the more general report (covered in our previous post), there is much good advice that will be applicable for any organisation, private as well as public sector. I would highlight the need for the multi-disciplinary approach to contract management, and the importance of good data, as being two of the learning points that most organisations could note usefully.

And remember, the NAO contract management good practice framework is available here. It’s taken a while, but as the lead author of it back in 2008, I’m personally very pleased to see it being referred to and used widely now.

 

Voices (4)

  1. Effwhitt:

    If you play it back fast it looks like Max Headroom…

    1. LM:

      I must cede and accept that your reference – to Max Headroom – far exceeds my attempt with Alan Tracey. The similarities and characteristics are truly uncanny. (I was slightly distracted by the view that he is plastic and a puppet of Maude, but Max Headroom he shall be!)

      If anyone can think of better one for Napoleon, all suggestions welcome…,

      1. Effwhitt:

        Voldemort?

  2. LM:

    The NAO report was very good. The ‘Oscar winning’ performance of ‘Alan Tracey’ (Thunderbirds…) and Napoleon at the PAC was something to behold. You couldn’t make it up – but these two clearly do!

    http://www.parliamentlive.tv/Main/Player.aspx?meetingId=15993

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