Contracts and KPIs – Lessons Learned

Issue 1 - Lack of a detailed specification at outset in which deliverables were not clearly articulated within each workstream. There have been difficulties in holding suppliers to account for specific tasks and outcomes.

Recommendation 1 - A detailed specification should be expressed specifically in outcomes and where necessary, examples provided.

Issue 2 - A key enabler was the ability to use existing framework contracts for technical and legal specialist services. Also, the ability to access the main supplier's sub-suppliers through obligations in the main contract ensured supply chain issues were addressed in a timely manner, to the benefit of all parties.

Recommendation 2 - As integrated delivery was a key success factor, it was suggested that this could be built into contracts to ensure greater resilience in the testing and delivery phases.

Issue 3 - Tripartite relationship between suppliers and project team not settled until the operational phase commenced. There were difficulties experienced in having the multiple suppliers working harmoniously.

Recommendation 3 - If there is a delay in a project, there should be a fresh stock take of technology platforms available before re-starting.

Issue 4 - No agreement on when new IT system must be operational prior to contract award. No detailed project plans for implementation and operation.

Recommendation 4 - Effective timeframe for delivery is required and a project plan with a critical path and key milestones is needed.

Issue 5 - A Service Owner considered that there was a lack of up-front clarity by the Contractor on roles and responsibilities in respect of a solution. This led to the Contractor changing the expected responsibilities for the new service provider during knowledge transfer sessions.

Recommendation 5 - Roles and responsibilities for all parties should be clearly documented and should include the proposed service design.

Issue 6 - Technical information was not regularly updated during contract lifetime. Therefore, when information was required for tender projects it had to be updated before issue. This was very time consuming and led to inaccurate information being used, resulting in additional exit costs.

Recommendation 6 - Ensure technical documentation is updated regularly. Contract management teams should have a checklist of activities to be provided by Contractor on a regular basis (i.e. annually). This is particularly relevant for long-term contracts that evolve over time. An up-to-date contract exit plan is imperative to ensure there is clarity on roles and responsibilities and any associated costs.

Issue 7 - The ability to procure services under existing frameworks was seen as an advantage, to both leverage existing relationships and to make the process faster.

Recommendation 7 - Formally building integration/collaboration into future contracts should be considered.

Issue 8 - A draft Exit Plan was developed by the Contractor but not agreed with the Authority. The contract exit plan was not updated throughout the life of the contract, resulting in additional requirements being identified for exit and so increasing exit costs.

Recommendation 8 - An Exit Plan should be developed in line with the Contract terms and conditions and updated regularly. All exit costs should be agreed as part of this review. If services are to be onboarded, consideration should be made at the outset as to how they will be off-boarded.

Issue 9 - Data migration is particularly difficult when contractual issues with the incumbent supplier and third party sub-contracted supplier arise.

Recommendation 9 - Ensure early engagement with supplier to iron out issues and develop the data migration plan, responsibilities and resources for all parties.

Issue 10 - The deficiencies in the service provider's approach to recording and reporting costs were not identified at the outset. If this had been addressed at the start of the contract the VFM provisions of the contract could have been correctly and transparently applied over the contract term.

Recommendation 10 - The Contract Management team should ensure that the approach to recording and reporting costs is transparent and in line with the contract.

Issue 11 - The relationship between the supplier and the Project has become strained over misunderstandings and differing ways of working. The Project team were given only last-minute advice that meant delivery would not be possible.

Recommendation 11 - A revised communication plan, with key messages tailored for each stakeholder group should be put in place and integrated with overall plan.

Issue 12 - The contract contained KPIs including service levels. Adequate evidence had not been provided to support the attainment of these levels. The contract management team put measures in place so service level achievement could be evidenced.

Recommendation 12 - Contracts should contain remedial measures (eg service credits, processes) that could be applied if the Contractor does not adhere to its obligations. The Contractor should be asked to provide information to support service level achievement.

Issue 13 - The Contractor did not have a good understanding of the services/products supplied to Service Owners and didn’t provide the most knowledgeable resources during Knowledge transfer sessions.

Recommendation 13 - A mechanism should be included in the contract management process to ensure that the Contractor maintains a detailed knowledge of the services provided by 3rd parties and that knowledge transfer occurs at contract exit.

Industry guidance/ further reading

PRINCE2, Managing successful projects with PRINCE2, 6^th edition (2017), pp. 34, 36, 85 & 141.

NICSHR, Scoring Social Value – Construction contract (Webinar), via LInKS.

NICSHR, Scoring Social Value – Services and ICT Contract (Webinar), via LInKS.

NICSHR, Scoring Social Value in Services and IT Public Tender Competitions (e-Learning), via LInKS.

Department of Finance: Managing public sector contracts | Department of Finance (finance-ni.gov.uk)