Contract Management Framework - Colchester …

1 Contract Management Framework 1 Contents Purpose and Scope .. 2 The Contract .. 2 The importance of the Contract .. 2 Contract Management .. 3 The Toolkits .. 4 Outline of establishing a Contract Management Process .. 5 Toolkit 1 Tier 1 Strategically Important contracts .. 7 Development the Service Level Agreement: .. 7 Data Collection .. 7 Financial performance .. 7 Contract Meetings .. 8 Terminating the Contract .. 8 Toolkit 2 Tier 2a Operationally Essential Contracts Back to Back Sub Contracts .. 10 Toolkit 3 Tier 2B Operationally Essential 13 Development the Service Level Agreement: .. 13 Data Collection .. 13 Financial performance .. 13 Contract Meetings .. 14 Terminating the Contract .. 14 Toolkit 4 Tier 3 Operational 16 Financial Compliance .. 16 Notice and Termination .. 16 Dispute Resolution .. 16 Process 1 Open Tender Procedure .. 24 Process 2 Restricted Tender Procedure.

2 25 2 Purpose and Scope This document is provided as a guide to managing contracts in which we, the Trust, are the Purchaser and Provider of goods or services. It aims to give a toolkit for each category of Contract ; these toolkits will enable departments to take ownership of those contracts that are individual to their department. It is important to remember that contracts are inextricably linked to Procurement and to establish a good Contract the person who will act as Contract Manager needs to be involved in the procurement process. Tier 2a specifically provides guidance on Back to Back or Sub-Contracts for the provision of Clinical Services. The Contract The foundations for effective Contract Management are laid in the stages before the Contract is awarded. Preparation of a well-executed Contract forms the basis around which a good relationship can grow and will have a significant impact on achieving a successful outcome.

3 If the specification and subsequent Contract is poorly constructed, it will be much more difficult to make the relationship a success or resolve disputes that arise. A good Contract clearly identifies the obligations of the provider and the Trust. The obligations should be clearly defined and established as part of the tendering or service commissioning procedure and the Contract . Written evidence of these obligations (as well as identified need, Contract outcomes, delivery options, tender evaluation and contractor selection) must be retained as it forms part of the Contract . This file development also supports Internal Audit requirements for proof of why decisions have been made and the basis we have entered into any agreement. NHS Standard Terms & Conditions of Contract MUST be used to form the basis of Contract relationships, unless it is for a clinical service that we are subcontracting in order to deliver our national acute Contract or NHS England Contract In which case the national sub-contracting format must be used.

4 Contracts for building works will sometimes be let using other relevant formal Contract documents. The Contract should be the central reference throughout the duration of the agreement and all other information (specification, Service Levels, Key Performance Indicators and Change Notices) will be attached to the Contract as schedules. If you are preparing a Contract on behalf of the Trust you should ensure that our interests are protected, seeking advice from the Head of Contract Management . In the case of a subcontract that flows from the acute or NHS England contracts, the Commissioning Team can support you. There may be exceptional circumstances where a third party provides the Contract form; here it is important to check that it does not contain any clauses which are unacceptable to the Trust. Likewise if any aspect of the Contract documentation causes concern specialist advice should be sought before proceeding.

5 The importance of the Contract A Contract is a written or verbal agreement with specific terms between two or more persons or entities in which there is a promise to do something in return for a valued benefit that is intended to be enforceable by law. A contact also provides the tools with which to measure performance, value and effectiveness of the goods or services provided. Contracts are pivotal to the Trusts business dealings they help to identify where responsibility for goods and services that we use to deliver care to patients lies, and help us to take action when our providers are not meeting our quality expectations. 3 A Contract is a legally enforceable agreement, therefore it is vital, when entering into a Contract on behalf of the Trust, to ensure that: The correct procurement process has been followed The highest standards of probity in all dealings have been maintained The interests of the Trust are protected The rights and obligations are clear to all and the contractual relationships are clearly defined, deliverable and documented The relevant NHS Terms & Conditions of Contract shall apply Verbal agreements are avoided It is important to remember that a Contract can be created without written documentation particularly where a service commences and payment is made in consideration of such service.

6 Sending an email to confirm agreement or a simple phone call can tie the Trust into a Contract . Verbal or email contracts are not appropriate business practice and must be avoided. If in doubt, please contact the Head of Contract Management in advance for guidance. Contract Management Contracts should be actively managed. Put simply, consider contractors like an additional Trust staff resource, proactive Management and monitoring of contracts is as vital as staff Management . Ensure that there is a common understanding on Contract expectations and that any issues that arise are addressed quickly. Good communication and a program of regular performance review meetings should be in place. These meetings should be documented with actions allocated and timescales clearly set out for future reference. Buy In Goods/Services Trust paid to provide service becomes Tier 2a Approach procurement to determine the value, impact on trust and potential length of contact.

7 Approach the Commissioning Team for support Tier 1 Tier 2b Tier 3 Do we buy in the goods or service or do we get paid to provide the service? 4 The Toolkits This section details toolkits that have been developed to assist staff in managing contracts. Each toolkit has been developed to provide guidance based on the strategic importance of a Contract ; the toolkits are categorized as: Tier 1 Strategically Important Contracts - (assessed by: High Value, High Risk, Longevity) Tier 2a - Operationally Essential Contracts Back to Back Sub Contracts Tier 2b Operationally Essential Contracts - (assessed by: Medium Value, Medium Risk, Medium Term Tier 3 - Operational Contracts (assessed by: Low Value, Low Risk, Short Term) To determine in which category a Contract sits, some analysis has been conducted on the spend and nature of the Contract .)

8 Following this each new Contract entered into by the Trust must be sent to the Head of Contract Management so that a Contracts Database can be kept, analysis of the Contract will then be undertaken to determine where the Contract will sit and how much Management the Contract will require to ensure efficient running. The placement of a Contract in a tier is not determined by the spend level, but how the Contract needs to be managed, and its impact on our ability to carry out our business. This is because a low value Contract may be strategically important; for example a software maintenance Contract that may cost approximately 17,000 per year over a 5 year period will not amount to the m s spent on capital projects. However the software that is being maintained may relate to critical systems ( Theatre Management that ensures the surgical procedures are scheduled appropriately).

9 If the software fails for any reason, the Trust must be confident that the Contract has measures in place to drive the providing company to reinstate the systems, or develop a fix to have the system back up and running. The flow chart below gives an outline of how the Contract will be managed. It is intended that all contracts regardless of the tier they sit in will be actively managed either by the Head of Contract Management ; the Commissioning Team or within the service. 5 Develop Specification in conjunction with procurement Tender requirement (procurement to advise route and support the process Identify Contract Management Service Lead Contract Award Is Training required? Y/N. If Yes, organise Training session Develop the Service Level Agreement and Key Performance Indicators Create a Contract Commentary to sit with Contract file and aid future Management Create a Contract Management Schedule to include: Meeting dates Agenda Items Attendees Data Collection Schedules Data Analysis guidance Commence Contract Management Outline of establishing a Contract Management Process 6 TOOLKIT 1 STRATEGICALLY IMPORTANT CONTRACTS 7 Toolkit 1 Tier 1 Strategically Important contracts Contracts in this category must be managed with a hands on approach and this toolkit provides a guide to how that type of Contract Management will be undertaken.)

10 Examples of Tier 1 contracts would be the Managed Service provision for Locum staff or Serco services When constructing a Contract Management plan for a Contract that is rated as Tier 1, the Head of Contract Management will consider the following points. By considering each point and creating a plan around them the Contract has a high chance of succeeding. Performance of the Contract (Key Performance Indicators) Meeting schedules (to include Service Management ; Planning and future Planning) Financial Compliance Exit Strategy (In House) Notice and Termination Transition (out of the Contract ) Mobilisation (set up of Contract and service) Dispute Resolution Development the Service Level Agreement: The development of the Service Level Agreement will fall from the specification issued and the suppliers response to that specification. It will also be developed in conjunction with the supplier to ensure that the requirements can be met.