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Government & Public Sector

 
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THE IACCM PUBLIC SECTOR NETWORK

The purpose of the public sector network is to provide its members with insights to new trends and emerging practices in the fields of contract, commercial and relationship management. While these will be in the context of the public sector, they will draw from knowledge and ideas that are current and relevant in the private sector. A key goal is to improve the performance of public sector contracts and relationships.

The objectives will be met by sharing ideas, discussing challenges, exploring new directions and, where appropriate, initiating research or inviting experts to present on key topics related to contract, commercial and relationship management.

Meetings will be virtual (by phone or webinar) unless in specific cases there is an agreed wish to have physical meetings or workshops to develop specific initiatives.

 

Please take a minute to participate in the following survey https://www.surveymonkey.co.uk/r/IACCMPublicSector

 
 
Network Updates

Commercial themes for 2019

IACCM today announced key themes for contract and commercial management in 2019. These are based on global market observations and interaction with IACCM members from every industry. They represent the areas that are increasingly critical to the role and value delivered by commercial and contracting functions.

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Policy and Practice. Are they aligned?

Abstract In today's volatile, technology-driven markets, Governments worldwide are re-examining policies towards small and medium business. If these are to be the future drivers of economic wealth, there are many questions to be answered. Tim Cummins CEO, IACCM To change the world, you must first challenge the tenets that drive your perspective. In the report that follows, we examine the mechanisms that are currently used in public procurement to drive small and medium sized business growth. The findings suggest that some of the historical principles that have driven public sector procurement policies and spend in this sector may be outdated, especially with regard to today's policy objectives. The report shows how the contracting community perceives some of the widely accepted approaches and indicates a number of areas for further, in-depth research. I would like in particular to acknowledge the contribution to this report of Jose Arrieta, Small Business Executive at the US Department of Treasury, who has worked with IACCM for the last four years as an advisor on the US market. Jose inspired the research and our efforts to understand how public procurement officials implement small and medium sized business policy in their respective countries. The IACCM is an organization that has a footprint in 163 countries around the world, making it an ideal partner to learn about public procurement practices globally. In the words of Jose Arrieta: 'As the small business executive at the Department of Treasury I am constantly challenging our operations and policies to improve our business outcomes. To do this successfully, I must increasingly engage and learn from other organizations around the world. The IACCM is an organization that has the same values and I am very appreciative of their efforts on this report. I hope that its findings stimulate thought leadership and engagement from academics, policy makers, industry partners, and contracting professionals around the world, inspiring fresh approaches on this important topic'. This report is based on research undertaken in the period August - November 2015. It consisted of web-based surveys, supplemented by interviews and discussions with representatives from government, NGOs and private sector business, large and small. It highlights broad consensus over the theoretical benefits of SMB programs, but reveals that these are largely unquantified and, in the context of the public sector, that goals may not be well aligned with program design.

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Commercial Excellence: The World Awakens

Is your organization on the path to commercial excellence? McKinsey, the global strategic consultants, are just the latest to grasp the critical role that commercial competence plays in delivering performance and growth. In a recent article, they observe that leading organizations 'are now using superior execution rather than better offerings to outperform incumbents and drive growth'.

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Recommendations

I am the Contract Administrator for a municipality in Illinois (US) and we are currently evaluating various systems. Our goals include using GIS to tie documents to pinpoints on a map; setting alarms for alerting of key terms in contracts; managing the contracting process at arms length; minimalizing man power in the procurement process; providing transparency to the public; and ensuring protection of all documents. Does any one want to share research, provide suggestions, or discuss flaws in particular systems?

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Supplier Contract segmentation

Is anybody aware of any dynamic tools for contract segmentation ? What I am trying to achieve is to segment my contracts by the normal risk, complexity, value etc but I then want to overlay service/business unit specific criteria e.g. opportunity to service/business area in things like innovation, whether the relationship is growing in the future, standing still or declining etc I want to do this dynamically in order for the service/business area to understand the dynamic nature of contract management, the resources demands and potential skills gaps they may have. Any help greatly appreciated.

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Employee Non solicitation in USA w.r.t recently issued AntiTrust Law

With the recent US Dept of Justice ruling and FTC guideline on Anti Trust Law on No Poaching clauses in Agreements between companies, issued October 2016. Does the non-solicitation of employee clauses are now per say illegal in the US and cannot be accepted? A clarification would be of a great help.

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IFRS15 will apply from January 1, 2018. Will your processes and contract management platforms be ready?

In July 2015 the International Accounting Standards Board (IASB) confirmed a one-year deferral of the effective date of the revenue Standard, IFRS 15 Revenue from Contracts with Customers, to 1 January, 2018. Companies have the option to apply the Standard earlier if they wish to do so. As of January 1, 2018 IFRS 15 comes into force to address revenue from contracts with customers. This new standard is in line with initiatives from the IASB and FASB and is relevant for almost all customer contracts. IFR's 15 replaces IAS11, IAS18, IFRIC15 IFRIC13 IFRIC18 SIC31. It does not replace IAS39 or FRS9. IAS17 (leases) remains outside the scope of IFRS15. The revenue recognition model upon which it is based comprises five steps:- - contract identification - tracking of performance obligations - transaction price management - linkage of performance obligations to transaction pricing - revenue recognition The additional complexity associated with this new standard will in many cases place enterprise process and IT system demands which existing contract visibility are not able to address. An enterprise will be obliged to address processes, compensation plans, tax implications, key performance indicators and additional employee training. Enterprises may also discover that additional roles within the organization require visibility into contract data. These additional roles may include shareholders, investors, audit committee members, Board of Directors and others. Decisions must also be taken to conceive and allocate transition mechanisms for contracts at different stages in their life ranging from contracts initiated and completed prior to January 1, 2018, contracts running across January 1, 2018 and new contracts starting only after January 1, 2018. The fundamental concepts behind IFRS15 is increasing disclosure with respect to revenue recognition with an ability to link precisely that disclosure to contract data. The implications not only impact the management of individual contracts but particularly in cases where there are multiple contracts with single suppliers and where there are complex contract hierarchies. Even within a single individual contract multiple performance obligations may be required to be unbundled requiring fine granularity visibility into contract data. The timeline recognition of revenue becomes increasingly critical with the core concept being one of revenue recognition in line with the actual delivery of products or services. There is however ever greater consideration given to the time value of money thus the revenue value required for reporting purposes may be significantly impacted by exactly when and entity fulfils its delivery requirements, performance obligations, receives customer payment and any relevant interest rate at that moment in time. In summary IFRS 15 elevates contract management from being simply a commercially beneficial activity albeit with real financial rewards to a well-run enterprise to now being a governance obligation. This new obligation demands both internal processes and contract management IT platforms be sufficiently capable and reliable to provide accurate, repeatable and auditable reporting data. Hope this is useful..........www.symfact.com

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Performance related pay (Penalties / Incentives)

I'm exploring the idea of introducing performance related pay to better manage a number of contractors delivering property maintenance (planned and reactive) on behalf of a local authority. I am keen to learn of others experience (good or bad) and particularly of models which are not so admin heavily that it outweighs the benefits. Most models put a great deal of risk on the contractor, which I want to avoid (as ultimately the buyer pays for it in the end) so it needs to feel collaborative, and preferably offer incentive for added value... as opposed to a penalty for under performance. Within the arena of property maintenance, and circa 1300 jobs per month across a variety of disciplines, I cannot see an obvious model. Any thoughts welcome.

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LOGIC vs FIDIC

I have seen mostly FIDIC (Yellow Book) based contracts in my work environment for offshore contraction/installation works. But also LOGIC is widely used in the industry. I have searched the internet and the IACCM website, but I do not really seem to find an answer to the following question: - What are the main differences between FIDIC and LOGIC - And following when would LOGIC be preferred or FIDIC be preferred. Looking forward reading your opinions about this

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