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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

Brexit: a black swan with unexpected relevance for outsourcing contracts

Europe is in turmoil after Great Britain's vote to leave the European Union. Those who now claim to know what will happen now - in outsourcing or in other areas - will make two big mistakes: First, they will show that they don't understand what Brexit is.

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UK Public Sector Approach to Public Sector Fraud and Error

Estimates show the UK government could be losing between £22 and £49 billion per year to fraud and error. Debt owed to government currently stands at over £22 billion. Grant spending accounts for £139 billion, which is around 20% of government expenditure. The UK Governemnt Fraud, Error, Debt and Grants Function provides strategic leadership and sets cross-government standards for fraud, error grant and debt initiatives. It works with departments to: 1) Identify and reduce financial losses through fraud and error 2) Improve overdue debt management 3) Improve the effectiveness of grants whilst reducing the costs of their administration through the Grants Efficiency Programme 4) Identify more fraud and error and make sure changes are made to prevent it. 5) Provide counter-fraud remedies and common solutions to cross-cutting issues. The enclosed slides, published in Summer 2016, give an overview of the nature of the problem and also the key steps that the UK Government are taking to tackle this large problem.

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International Trade Statistics 2015

International Trade Statistics is produced by the World Trade Organization on an annual basis to provide a comprehensive overview of world trade. This year's edition provides data up to the end of 2014, covering trade in merchandise and commercial services as well as trade in global value chains.

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2015 Corruption Perceptions Index

Public sector corruption isn't simply about taxpayer money going missing. Broken institutions and corrupt officials fuel inequality and exploitation - keeping wealth in the hands of an elite few and trapping many more in poverty. Based on expert opinion from around the world, the Corruption Perceptions Index measures the perceived levels of public sector corruption worldwide. Not one of the 168 countries assessed in the 2015 index gets a perfect score and two-thirds score below 50, on a scale from 0 (highly corrupt) to 100 (very clean). More than 6 billion people live in a country with a serious corruption problem.

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Fostering Collabloration

Fostering an environment of collaboration in businesses large and small is a continuous process that is not without its difficulties, but research suggests it is worth the effort. Collaboration not only plays a key role in making strategy personal-this report finds a consistent correlation between effective enterprise-wide collaboration and business success. This EIU research, sponsored by BTS, explores whether firms are leveraging collaborative techniques to improve business success, the difficulties of collaboration and the value of collaborating across functions and levels to achieve strategic alignment. It is based on a survey of 249 business leaders in North America, Europe and Asia-Pacific. Key findings from the research include: • Effective collaboration correlates with better business results. In terms of market share leadership, the study found that leader organisations more often say it is practised routinely, than non-leader organisations (73%). • In top-performing companies by industry market share, collaboration is believed to be more effective at every level, from the C-suite down to line employees • Top-performing companies collaborate differently. They more frequently use collaboration to fix intra-organisational issues, such as planning future endeavours, while non-leaders are more frequently collaborating to fix specific client and customer issues • Collaborative culture is less fully realised in many large organisations, but executives from these companies remain convinced collaboration will play an increased role in the years to come

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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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Public versus Private Sector Contracting: A Contrast in Values

IACCM REPORT FINDING: Private sector personnel are almost 80% more likely to be influenced by the need to promote competition and minimize operating costs -Please share your thoughts. Hoping this generates some activity. When I read IACCM article, I was perplexed by the statement above and therefore I offer the following thoughts: In the U.S. public sector procurement is the intersection between three interconnected non-complimentary forces; law, public policy, and industry. Public policy combined with Federal law dictates that competition is the single most important aspect of the U.S. Federal procurement process. In accordance with the law contracting professionals in the U.S. Government are required to consider/ research 7 different socioeconomic categories before they can compete an opportunity in a full and open environment. At each layer acquisition professionals make a business decision about the capability of industry to perform the work at hand for a reasonable price. Contracting professionals are required to do this for simple procurements and large strategically sourced contract vehicles. In fact, at the Department of Homeland Security (DHS) the initial market research described above has helped create an industry base of 15,000 current contractors 11,000 of which are small and medium sized business. Each year over 3,000 new companies win a contract with the Department. This ensures that the Department has a highly competitive marketplace that is constantly competing to meet mission objectives and win contract awards. Although the Government incurs additional labor costs to perform the market research the cost savings from the robust market place and constant competition is tremendous. Furthermore, the companies that survive in the marketplace have a keen understanding of the mission and how to achieve it at the lowest cost. At DHS, performance metrics include rate of competition on each individual procurement ( 76% in FY 12) and operational cost savings (approximately $330M from strategic sourcing alone). The interesting point here is that the level of competition is so high that contracts tend to be awarded to industry partners that have determined the best way to meet the mission at the lowest cost. This is much different than the goal of helping a corporation maximize shareholder wealth. In the public sector (many times in my experience) we are contracting for services that would normally be an individual company’s competitive advantage. Meaning that many of the contracts we write are to perform a service that many companies would never outsource. The survey results posted above seem to indicate that public sector professionals do not value competition as a way to minimize operating costs. However, I believe public sector procurement professionals value competition just as much and work in a more complex environment that challenges them to think beyond a single value proposition (maximizing shareholder wealth). I am wondering if the way the question is written generated misunderstanding. If not, then I believe we need to resuscitate the discussion around minimizing operating costs and promoting competition to ensure that public sector employees understand how valuable this can be. Thoughts? Jose

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