Contract Health Check for Health

Contract Health Check Review in the Health Sector

The situation

This State Government Branch (the Branch) plays a key role in state-wide surveillance, monitoring and reporting for public health, within both one State Government and the Federal Government.

Procurement and contract management play an important role in enabling the Branch to deliver on its mission. These activities are currently supported on an ‘ad-hoc’ basis by an assigned contract manager for each ICT system. The Branch identified a need to strengthen this approach by uplifting the contract management capabilities across the Branch. This will include activities such as improving existing contract management plans, clarification of roles and responsibilities, standardising processes and, in general terms, aligning with better practice.

The need to uplift contract management capabilities was underlined by a recent Public Health ICT audit report, which identified the following challenges:

·        inadequate resourcing and attention to contract management

·        inadequate procedures for maintaining and assessing contract renewal or term

·        lack of communication between parties, lack of clarity, misunderstanding and hand over gaps

·        supplier disputes, failures, and breaches

·        lack of supplier performance monitoring

·        inadequate resourcing and limited expertise

·        inadequate/inaccurate contract portfolio reporting (Q-Contracts)

·        limited visibility of contract details and tracking.

Additionally, the Branch describes further challenges, including that key vendors are located offshore, which makes implementing changes difficult and time-consuming. Contract management plans, which were initially put together by the tender project team, have not always been reviewed and managed. Furthermore, review meetings are not regularly held, and performance issues not always addressed. Managing variations has also been identified as an issue as there is a lack of visibility and potentially understanding of what is in and out of scope.

The Task

The Branch engaged Grosvenor Procurement Advisory to carry out the following scope of works to help address the audit report recommendation, specifically regarding contract management:

1.     Review three ICT contracts, supplied through two SaaS vendors, within the Branch against better practice

2.     Assess current contract management plans and performance reports

3.     Establish baseline of knowledge and skills in contract management within the Branch including identification of opportunities for training and upskilling of staff; and,

4.     Recommend a more effective approach to managing and administering contracts within the Branch and focus on the required resourcing needs

Our approach

The overall approach to delivering this project included:

Step 1 – Establish and manage the project: establish project and finalise project plan, and establish status meeting frequency

Step 2 – Conduct Contract Health Checks: Confirm the methodology for contract health checks and review relevant documentation, including existing procedures and templates. Conduct health checks, meet with the Branch managers and suppliers to discuss findings, and present the results to the project team

Step 3 – Identify Better Practice: Design and execute a survey to all contract managers to understand current pain points, capability gaps, and priorities. Conduct workshops with contract managers to assess the current state, followed by Grosvenor’s Contract Management Maturity Assessment. Establish a baseline of knowledge and skills and benchmark against similar organisations. Develop findings and recommendations, integrating outcomes from steps 2 and 3, and validate with a workshop involving the the Branch project team

Step 4 – Develop final report: Agree on reporting format and key content with the Branch project team. Draft final report, incorporate feedback to meet the Branch requirements, and finalise report. Optionally develop change and implementation plans, deliver contract management training, and update framework, tools, and templates as needed.

As part of Step 2, Grosvenor interviewed Contract Managers, key personnel from the two external SaaS vendors, and other stakeholders to gain deeper insights into the operational context of these agreements and to further validate the findings from the document review.

As part of Step 3, the Branch requested Grosvenor to deliver an in-person Contract Management workshop. The workshop centred on the findings from the contract health check review and the Branch CM capability survey, which was benchmarked against data from similar organisations. It included foundational training on contract management and a walkthrough of a better practice Contract Management Plan. A detailed course book was shared with all participants post session.

Additionally, Grosvenor introduced the Branch to their counterparts in the state’s eHealth department. The purpose of the session was to determine if eHealth had a relationship with the same supplier group and explore potential benefits of collaboration on specific issues. Additionally, meeting sought to establish an ongoing relationship between the two parties to facilitate mutual support and knowledge sharing going forward. eHealth agreed to share artefacts related to contract management, including contract management templates, value/risk segmentation tool, standard operating procedures, and other relevant materials.

The outcome

The contract health checks by Grosvenor were very well received, providing valuable insights and recommendations for the Branch. In addition to the final report, Grosvenor assisted the Branch in drafting a Contract Extension Report, aiding in the decision on extending an agreement with a one of two SaaS providers. The training sessions were well received, enhancing contract management capabilities within the Branch and the introduction to eHealth fostered collaboration, enabling knowledge sharing and access to useful resources to improve contract management practices.

Need a contract health check? Book a chat with Grosvenor’s MD, Stefan Gassner