Serving the Community

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Serving the Community By Using the Private Sector
A User Guide to Contract Management
15 February 2007
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When does contract management begin ?
General impression

• After contract award

Good practice

• Start from pre-contract stages

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Contract management in government outsourcing
Developing the business case
Tendering and selection
Managing the contract
Market Sounding Exercise

• Market interest
• Market capability
• Business model

Develop attractive commercial arrangements
Attract the most appropriate contractors
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Contract management in government outsourcing
Developing the business case
Tendering and selection
Managing the contract
Develop

• High quality tender documents
• Robust tender evaluation method

• Conducive to effective contract management
• Select honest and reputable contractors, thus
  reducing subsequent monitoring and enforcement
  effort

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Contract management in government outsourcing
Developing the business case
Tendering and selection
Managing the contract

• Prepare for the transition
• Monitor service delivery
• Administer the contract
• Conduct review and renewal

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A User Guide to Contract Management

• Collective wisdom

2006 Survey on Government Outsourcing
Outsourcing Review
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A User Guide to Contract Management

• A handy reference for
• Outsourcing issues faced by the departments
• Best practices
• Local and overseas experiences
• Assistance

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Regulatory framework for outsourcing contracts

• Tendering and selection

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Regulatory framework for outsourcing contracts

• Mandatory requirements for service contracts
  (excluding construction services contracts) that
  rely heavily on deployment of non-skilled workers

• FC No. 3/2004
• Mandatory requirements on tender assessment
• Demerit Point System
• Conviction records

FC No. 3/2001 Marking scheme to take account of
proposed wages and working hours

• FC No. 4/2006
• Tightened mandatory requirements on tender
  assessment

Standard Employment Contract

• FC No. 5/2004
• Mandatory wage level

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World Trade Organisation Agreement on Government
Procurement Agreement (WTO GPA)
Objective
To provide an open and fair competitive
environment amongst domestic and foreign
contractors
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Compliance with the WTO GPA
Challenges

• Difficult to decide whether or not a service
  tender is governed by WTO GPA

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Compliance with the WTO GPA

• Balancing competition and compliance with the WTO
  GPA

• Seek advice from the DoJ and other relevant
  authorities

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Outsourcing roles within a department

• Ensure good internal departmental communication

Division A
Division C
Headquarters
Division D
Division B
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Outsourcing roles within a department

• Between Headquarters and District Offices

• Headquarters
• Establish relevant procurement policy and
  framework
• Advise on best practices
• Handle tendering and selection process
• Encourage continuous improvement
• District Offices
• Develop business requirements
• Monitor the performance of contractors
• Provide feedback to Headquarters

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Outsourcing roles within a department
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Develop high quality tender documentation
Three useful guidelines

• Develop relevant and concise service
  specifications
• Observe the golden rules
• Incorporate provision for variations

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Develop relevant and concise service
specifications
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Golden rules for drafting tender documents
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Incorporate Provision for variations

• Service scope variations
• Continuous improvements

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Encourage good practices from contractors

• Avoid exploitation of labour
• Wage
• Maximum working hours
• Holidays

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Encourage good practices from contractors

• Monitoring measures against exploitation of
  labour
• Posting notice
• Setting up enquiry/report hotlines
• Setting up a central independent investigation
  team
• Conducting selective checks on payroll records
• Soliciting employees feedback

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Encourage good practices from contractors

• Balancing the effort to avoid exploitation of
  labour

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Encourage good practices from contractors

• Good customer and employee relationships

Gauge feedback
Customer Relationship Management
Staff development
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Encourage good practices from contractors

• Good behaviour from subcontractors
• Self-reporting of operational and management
  information

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Contractor malpractices
Reporting
Investigation
Awareness
Responsive complaint handling system Formal and
secure channels Random checks
Independent investigation team Partner with
relevant authorities Legal implications with
sharing of information
Training Publications
Sharing of responsibilities between contract
managers and frontline supervisors
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Dispute resolution

• Take appropriate action
• Formal approach
• Informal approach
• Escalation mechanism

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Dispute resolution

• Alternative dispute resolution approaches
• Assisted negotiation
• Assisted mediation
• Commercial settlement
• Arbitration

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Dispute resolution

• Demerit Point System
• Termination and Exit
• Legal Actions

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Thank You