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THE IACCM PUBLIC SECTOR COMMUNITY OF INTEREST

The purpose of the public sector community of interest 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

 
 
Community Updates

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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Where is the growth?

The Financial Times recently published an analysis of Europe's fastest growing companies during the period 2012 - 2015. Perhaps the most interesting point is the industry segmentation of the list and the extent to which it reflects issues of market competition, disruption and opportunity.

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Understanding the IACCM CCM Learning & Certification Programs

This hour-long demonstration explores IACCM's Contract and Commercial Management (CCM) certification program. See why your peers are currently learning and becoming certified with IACCM. Participate in the only global training and certification program specifically designed to enable Commitment Management professionals to raise their skills and knowledge in contracting, as well as attain an increasingly sought after certification. It is an investment in your future. See the program that recently caused one participant to say I was really impressed by the quality of the online training which was given by real life professionals. This demo will cover these integrated program elements: Skills assessment tool E-Learning modules Articles and white papers Quizzes Message boards Certification

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North Carolina Procurement Transformation

There are nine specific areas that the State of North Carolina should address to improve the efficiency and effectiveness of the procurement function.

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Assessment and Improvement of Construction Closeout at Michigan State University

This report outlines a recent research project undertaken by School of Planning Design and Construction (SPDC) faculty and students which examined construction closeout processes at Michigan State University (MSU). Funding for the research was provided by MSU's Office of the Vice President for Finance and Operations, to create a Center for Project Performance Improvement and to undertake annual research in construction project management relevant to Michigan State University. For academic year 2006-2007 two projects were undertaken 'Assessment and Improvement of Construction Closeout at Michigan State University' and 'Vendor Performance Assessment Methods'. This report addresses the 'Closeout' project.

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Implementation of the EU Public Procurement Directives

The public procurement market in the EU is huge. Every year more than a quarter of a million public institutions and authorities in the EU spend around 14% of GNP on acquiring services, construction works and goods of all kinds. This is an important channel for public spending and provides a market for goods, services and construction works from both domestic and foreign companies. In recent months, EU member states have stepped up their efforts to implement new procurement directives: Directive 2014/24/EU on public procurement (known as the 'classic directive'), Directive 2014/25/EU on procurement by entities operating in the water, energy, transport and postal services sectors (the 'sector specific directive'), and Directive 2014/23/EU on the award of concession contracts.

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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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Flexibility in technology contracts with the Public Sector?

When does 'no negotiation' mean 'no negotiation' in technology contracts with the Public Sector? In principle, public procurement rules are seen in Europe as providing no flexibility for negotiation of terms and in general, policy on areas such as liabilities and indemnities allows for no variation. However, in reality, what do you experience? On these terms - and others like warranties, IP, data security - do you experience that there is no negotiation, or do you find a less consistent approach? And if inconsistent, is that because some countries are less rigid, or some situations? Thanks! Pablo Cilotta

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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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Definition of "Commercial Procedures"

I am responding to an RFI for a US Government contract. One of the questions asks whether similar services have been provided to the private sector and if so, what kinds of commercial procedures and T&Cs were used. I am looking for input on how "commercial procedures" would be defined in this context. I am guessing this would be on a par with the Federal Acquisition Regulations on the US Government side....i.e. procedures that somewhat mirror the FAR for everything from bidding work to subcontracting to contract management. Thanks in advance for any insight you can lend.

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Top 5 tips to maximise value in public sector contracts

While the economic outlook for the UK looks set to improve, the pressure on public finances continues. With significant further public spending restraint expected until 2017/18, this pressure is unlikely to fade away as the 'new' conservative government beds in during the rest of 2015 and beyond. Against this backdrop of ambitious public sector savings targets over the next few years and increasing scrutiny over spending, delivering better value at lower cost is essential for all public bodies. The scale and extent of the required cuts means new ways of working are needed. Taking the right approach to contracts in the public sector has an important role to play in delivering the savings that are needed. Don't forget the service delivery phase Public sector bodies are prepared to apply significant effort in the procurement phase of large complex projects. But they generally do not continue this level of support in the critical service delivery phase. This is where most money is spent and where there is greater risk of losing essential value. The lack of robust contract management is often dramatically exposed too late...when significant value to the public sector is already lost and disputes arise a few years later. To achieve intended value for money for public spending, organisations need to consider the whole contract lifecycle and invest in robust contract management from the outset. They need to ensure knowledge is transferred from the procurement phase onwards and hold contractors to account for the full extent of what they agree to deliver. While the need for the public sector to provide robust contract management is, at times, acknowledged, the ability of public sector organisations to deliver it is sometimes limited. A lack of commercial skills and know-how to match the private sector contractors potentially puts the public sector at a disadvantage. Don't under-estimate the task Another key factor is the lack of understanding of what is required in the services phase of a contract to provide proper contract administration and to manage the often complex mechanisms in large service contracts. The level of attention and rigour required is often underestimated and the necessary complexity of the contract management task is not well understood. In underestimating the requirements of contract management, public sector organisations can inadvertently allow contractors to take advantage and transfer the risk back to them. Top tips In order to minimise the risk of losing value throughout the whole contract lifecycle here are a few things that public sector organisations should consider: 1. Focus on the entire contract lifecycle - It's in the service delivery phase where most money is spent and the risks are arguably the greatest. Public sector organisations need to extend the scrutiny and focus on procurement over the whole of the contract lifecycle in order to deliver value for money. 2. Bridging the gap between procurement and contract management - Too often the expertise of a procurement team is lost after contracts are awarded. Ensuring that important knowledge and expertise are transferred from procurement to the latter phases of the contract lifecycle is critical to delivery. 3. Continuously monitor compliance, performance and finances - Checks and balances across the contract lifecycle to prevent value leakage. Organisations must monitor and address the gap between the 'delivery promise' and the value actually delivered. 4. Independent professional advice can be crucial - The complexity of the task of contract management shouldn't be underestimated. Independent professional advice can be used proactively and cost effectively after the contract has been awarded to secure the contracted outcomes and avoid unnecessary failures. 5. Don't wait until it's too late - The lack of robust contract management is often dramatically exposed too late when significant value is already lost. Invest upfront in contract management to manage risks and ensure the value embedded in the contract is delivered. In a climate of continued public sector austerity, rising demand and increased scrutiny, the public sector needs to ensure that contracts are delivering their full value. By applying rigour in contract management to retain the procured value post award, the public sector should get exactly what it deserves - excellent value for money public services.

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Coupa or Ariba

Hi, Which one is better for a Public Sector organization? Can any of these handle Contract Management? Thanks,

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social media

We are looking for experiences and recommendations for using social media for procurement in the public sector. Please post a response in this forum or send to rharde@iaccm.com. All comments and suggestions are welcomed. Thanks.

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