Contract management framework.jpgThe Contract Management Framework published and distributed by National Treasury is a watershed moment for Procurement practice in the public sector, Rivaj Parbhu, Head of Business Development at Realyst Contract Management, tells SmartProcurement.

Parbhu says the framework signals intent within the South African government to take a proactive approach to standardise the management of state contracts. Importantly, it clarifies the process that National and Provincial departments must follow to achieve good practice in contract management while providing government departments with an achievable timeline in which to do so, i.e. it is to be implemented by 2013.

The Contract Management Framework, accompanied by a Self-Assessment Guide and an Implementation Guide, is a comprehensive guideline which was initiated in August of 2010 with the express purpose of spelling out “the requirements for government institutions pertaining to the management of, and accounting for, contract agreements” (National Treasury Contract Management Framework, 08/2010, Version 1).

Provincial and National departments are now required to adopt an organisation-wide approach to the management of contracts across the entire contract lifecycle. This approach is advocated in order to “deliver more services or a higher level of service to the community and other stakeholders”.

The link between improved service delivery, leveraging income tax and improved management of contracts in the public sector has been widely welcomed following international research into the programmes of public sector entities across the globe, he says. For example a report released by the UK National Audit Office in December 2009 indicated that improved contract management on service contracts in the UK Public Sector could generate efficiency savings of £290-million.

This release of a single, national Contract Management Framework places the South African Public Sector in a select group of countries which have already adopted such a broad perspective for managing state contracts, explains Parbhu. While similar frameworks exist in the United Kingdom, Australia and in several countries in Europe, it is by no means a universally accepted approach by governments. South Africa has taken the unique step of advocating compulsory compliance with the framework within measurable timelines, which serves as a clear signal of serious intent.

The framework compels the relevant public sector bodies (municipalities are excluded at this stage) to achieve key implementation milestones within specific timeframes. Highlights of this include:

• A review of all contract management policies and procedures against the framework during 2010/2011.
• Redrafting of these by 2011/2012.
• Complete compliance by no later than 2013.

With such specific timelines, Supply Chain teams in National and Provincial departments will be expected to act immediately by reviewing framework requirements and assessing their internal capacity to meet those parameters.

This is the first in a series of articles to be published in SmartProcurement which will analyse the important aspects of this framework.

Copies of the framework are available for download from the website of the Accountant General or alternatively you can request a copy by clicking the links below:

Contract Management Guide
Contract Management Self-Assessment
Contract Management Framework

For more information about the Contract Management Framework in government and how to achieve compliance contact Rivaj Parbhu of Realyst Contract Management at rparbhu@realyst.com