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Effective Contract Management - Getting it Right! 24 th January 2007

Effective Contract Management - Getting it Right! 24 th January 2007. Content Introduction to echelon – who are we? echelon portfolio – who do we work with? Identification of Drivers – how do we choose? Contract Options – what options are open to us?

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Effective Contract Management - Getting it Right! 24 th January 2007

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  1. Effective Contract Management - Getting it Right! 24th January 2007

  2. Content • Introduction to echelon – who are we? • echelon portfolio – who do we work with? • Identification of Drivers – how do we choose? • Contract Options – what options are open to us? • Developing the contract – methods • Pitfalls - what can go wrong? • Conclusion

  3. introduction to echelon • Extensive client & contracting experience of Partnering • Development of bespoke solutions • Full range of services offered to Social Housing clients • Innovative and well regarded • Focus on full stakeholder engagement & legacy building • Working with 20+ organisations (LAs, ALMOs & RSLs) • We are not legal advisers? • ‘Making Partnering Work’

  4. echelon portfolio

  5. Context? • How many delegates are using Partnering Contracts? • PPC/TPC? • NEC? • JCT? • Other? (define) • Why did you select that Contract? • What training was provided? Joint? • What input did Contractor have in contract development?

  6. Drivers – think…! • Does the contract drive the project or the project • drive the contract?

  7. Drivers – consider… • Volume of project • Longevity of project – ongoing, finite? 30 years? • What is the right number of Contractors? • How do we incorporate second tier? • Cost Model • - Fixed price? Target Cost? Open Book? SOR? Hybrid? • How do we incentivise?

  8. Drivers – OJEu • Procurement Route – Open, Restricted, Negotiated • Restricted seems to be preferred – why? • Definition of contract – works (£3.6m)/service (£144k) • Issue - How do we differentiate at PQQ stage? • Openness & Clarity – must do as we say! • Award Notice • Break these rules at your peril – contractors will challenge!

  9. Developing the Contract • 4 phases of development: • Pre-Tender phase • Tender process • Implementation Period – ‘Golden Hour’ • Delivery Phase

  10. Managing the Contract • Allow adequate set-up time • Where do we choose the Contract? • Pre-award of post award? • Merits in involving contractor(s) in contract development • Are we to prescriptive? • Defined Project Manager(s) • Process must be led - Make things happen!

  11. Generic Project Flowchart

  12. Project Team Organisation

  13. Pitfalls – What can go wrong? • The wrong people • Lack of cultural readiness • Unclear objectives • Inadequate performance measurement • Variation process not clear • Blurred Client/Contractor role • Poor communication • Loose specification • Contractor capability issues • Continuity

  14. Pitfalls – The Wrong People • Wrong people in roles can derail project • Lack of interpersonal skills • Traditional behaviours slip-in • Lack of understanding of mechanics • Example…..

  15. Pitfalls – Lack of cultural readiness • All parties not always ready to make project work? • Necessary organisational change not occurred • Lack of buy-in from wider stakeholders • Change doesn’t happen by itself • Contract needs to be driven • Example…

  16. Pitfalls – Unclear Objectives • No clear objectives for project • Roles and responsibilities not defined and/or • understood • Lack of mutual objectives leads to….. • Conflicting objectives • Example…

  17. Pitfalls – Inadequate performance • Measurement • Lack of clear targets • No KPIs on project • Lack of definition in collection process • Lack of structured review process • Data not benchmarked (internal & external) • Data not used to drive project • Example…

  18. Pitfalls – Variation process not clear • Claims culture • No clear guidance within contract • Poor data within (asset management data) • Lack of joint survey process • Onerous contract conditions • Risk and reward? • Example…

  19. Pitfalls – Blurred Client/Contractor Role • Who is in charge? • Poor technical dataflow (surveys) • Poor relationship with end-users • Unnecessary duplication of processes • Example…

  20. Pitfalls – Poor Communication • Delays in instructions/information • Information overload • Lack of defined protocols • No early warning/dispute resolution process • Poor record keeping • Example…

  21. Pitfalls – Loose Specification • Lack of definition in scope & requirements • Poor choices in materials etc. • Conflicting instructions within documents • Contractors like driving buses! • Example…

  22. Pitfalls – Contractor Capability • Lack of resources • Over reliance on supply chain – fishing in same pond • Lack of direct delivery • Lack of performance measurement down chain • Lack of incentive down chain • Inadequate site management • Example…

  23. Pitfalls – Lack of Continuity • Framework agreements and call-offs – continuity? • Stop-start approach affects capability • Breakdowns in supply chain continuity • Loss of economies of scale • Inadequate stock data and long-term AMP • Example…

  24. Conclusion • Many projects are being poorly managed • Lack of focus on holistic approach • Resources not allocated at right stages in process • Lack of mutual objectives • Weaknesses in performance management • Lack of understanding of new contracts

  25. Can we Fix it..? I bloody hope so..?

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