The UK Government’s latest Contract Management Playbook is generating significant interest across the public sector and rightly so. We and the World Contract and Commercial Management Association have been preaching this for years!
For many years, organisations have invested heavily in improving procurement processes. Tender documentation has become more sophisticated, evaluation methodologies more robust, and governance around contract award much stronger. Yet despite these improvements, one area has consistently lagged behind, post-award contract management.
The Cabinet Office’s Playbook sends a clear message that awarding a contract is not the end of the commercial journey, it is the beginning. Too often, contract management is confused with contract administration. Administration focuses on maintaining records, processing invoices, filing correspondence and ensuring contractual documentation is complete. Effective contract management goes much further. It is about actively managing supplier performance, identifying risks before they become problems, driving continuous improvement, and ensuring both parties achieve the intended commercial outcomes.
The Playbook encourages organisations to adopt a far more proactive approach throughout the life of every contract. Many contracts encounter difficulties during the first few months because insufficient attention is given to the handover and mobilisation. A successful mobilisation phase should establish clear governance arrangements, agreed responsibilities, communication protocols, reporting requirements, risk registers and implementation milestones. Good governance provides clarity and accountability. Every significant contract should have clearly defined roles and responsibilities, documented decision-making processes, escalation procedures and regular performance review meetings.
One of the most effective tools for achieving this is a well-developed RACI matrix, ensuring everyone understands who is Responsible, Accountable, Consulted and Informed for every major activity. Risk management should never be viewed as a one-off exercise completed during procurement. Commercial, operational, financial and legal risks continue to evolve throughout the life of a contract. Successful organisations regularly review risks, monitor emerging threats, agree mitigation actions and maintain an up-to-date risk register. Contracts should deliver measurable business benefits—not simply goods or services. Organisations should continually ask:
Are we achieving the value for money originally promised?
Are expected efficiencies being realised?
Are service improvements actually being delivered?
Is innovation being encouraged?
Without regular benefits reviews, organisations often fail to recognise value leakage until it is too late. One of the most overlooked elements of contract management is planning for the end of the contract. Exit planning should begin long before expiry. Effective exit management reduces disruption, protects organisational knowledge, ensures smooth transitions and avoids expensive disputes during handover. Planning the end from the beginning is simply good commercial practice. Modern contract management is increasingly based upon collaboration rather than confrontation. Regular supplier meetings, joint performance reviews, continuous improvement initiatives and early issue resolution all contribute to stronger supplier relationships. Organisations that engage constructively with suppliers are generally better placed to achieve innovation, reduce costs and improve service delivery.
The Cabinet Office’s guidance reinforces a message that experienced commercial professionals have understood for many years: Poor procurement can lose you the contract. Poor contract management can lose you millions after the contract has been awarded. Winning a contract is only the starting point. The real commercial value is created—or destroyed—during delivery. Research by World Commerce & Contracting estimates that organisations lose, on average, 9.2% of annual contract value through poor contracting and commercial practices. Much of this loss occurs during the post-award phase, where contracts are not actively managed to protect value and manage risk. The increasing emphasis on post-award management means organisations need to invest not only in procurement capability but also in contract and commercial management skills.
Our courses cover both pre-award and post-award activities, including procurement strategy, contract formation, governance, mobilisation, supplier relationship management, performance measurement, change control, risk management and contract close-out.
To find out more about our range of contract and commercial management courses, visit www.dpss.co.uk
