Government waste due to poor contract management

Published: 05 Nov 2010 Average Rating: unrated Print

A hard-hitting report has highlighted weaknesses in public sector procurement. Improved contract management is clearly a key element for any solution. IACCM's press release follows.

Inefficiencies in public spending are a result of the lack of defined practices for managing supply contracts and relationships, according toIACCM, a leading authority on contract and commercial management.

The recent review of UK public finances by Sir Philip Green highlighted what the Topshop owner called 'shocking' spending processes, claiming that no business couldsurvive the level of waste from the £191bn of spending he reviewed.

According to IACCM CEO, Tim Cummins, "as the complexity and volume of public sector procurements has grown, the organisation and procedures to manage them have lagged far behind and, in many cases, the investments in new procurement practices and external consultants have directly undermined success and value for money."

With the government planning significant cuts in spending, the efficiency of managing contracts and supplierswill also need to be improved in order to fill the nation's budget deficit, said Mr Cummins.

Several previous reports have also revealed that public sector agencies are ineffective at managing contracts and suppliers, such as The Economist (August 2009)and National Audit Office reviews. These reports suggestthat the public sector lacks most of the necessary ‘best practice’ capabilities and behaviours, a finding which is supported by numerous top suppliers and reflected in the unwillingness of Government departments to collaborate.

There is a carefully researched set of defined practices that organisations need to follow if they are to be successful at managing their supply contracts and relationships", said Mr Cummins. "Whereas the private sector took steps to raise its competency by investing heavily in skills and resources to shape and manage these contracts, government sought to escape the problem by pushing responsibility for success onto consultants and suppliers."

The International Association for Contract & Commercial Management (IACCM) is a non-profit organisation dedicated to enabling both public and private sector organisations and professionals to achieve world-class standards in their contracting and relationship management process and skills. It provides executives and practitioners with advisory, research and benchmarking services, and worldwide training and certification for contracts, commercial and relationship management professionals. http://www.iaccm.com


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