Post-award contract management leaves much to be desired at many authorities, research finds

The survey, of 62 procurement professionals and lawyers, followed by an online roundtable, found that many public authorities are not utilising KPIs and other contract management tools available to them as much as they might.

The Procurement Act 2023, which came into force in February 2025, places greater emphasis on the whole lifecycle of public contracts, not just the procurement stage. It mandates the setting of KPIs on contracts with a value of more than £5m and contracting authorities should annually assess and publish information on supplier performance against these KPIs.

Many agreements fail to deliver their promised value to the public purse due to a lack of monitoring and maintenance. Some estimates that the “atrophying of value” through neglect can run as high as 70% of the potential value of public contract.

Despite this, the survey found that 70% of the authorities surveyed ‘seldom’ or ‘never’ keep an auditable evidence file on the performance of KPIs (compared with just 11% of those who ‘always’ do), while only a little over a third of legal and procurement staff (36%) are ‘always’ or ‘usually’ involved in setting KPIs and even fewer engage in monitoring, measuring or reporting on contract KPIs after a contract has been awarded.

“Contract management in public sector organisations is poor,” one respondent told the survey, echoing many similar comments. “Our own internal audit has identified poor practices and record keeping, but as with everything procurement-related, it is not always given high priority to fix. Contract managers are usually staff within the service area allocated the contract management duties, usually on top of their normal work, and have little or no time to actually complete it.”

According to the survey, 86% of authorities vest the management of contracts with the operational department receiving the service - just 14% of respondent authorities said that they have a dedicated contract management team. Consequently, only 13% of contacting authorities have a formal procedure to review the successes or failures of previous contracts when structuring re-procurements; instead this process is usually ‘informal’ (56%), 'occasional' (28%) or ‘rare’ (3%).

Moreover, only 12% of contracting authorities ‘usually’ ask their supply chain for feedback on how they perform as a client compared with 73% who ‘rarely’ or ‘never’ do so. 

Rebecca Rees, partner and Head of Public Procurement at Towers & Hamlins, said that contractors will need to put a much stronger emphasis on post-contract monitoring and management to comply with the new act and to ensure that they receive the full value of the contracts they let.

 “The conversation is changing now,” she said. “It is clear with social value and other non-economic criteria comprising a significant part of the award criteria, what a supplier promises at tender stage can make the difference between winning and losing the bid: so if they don’t deliver on the criteria on which a contract has been won, then they should be able to lose that contract. But such enforcement needs to be underpinned by robust KPIs showing that non-delivery in an auditable, transparent and process-driven way.”

The full results and analysis of the research can be found at www.localgovernmentlawyer.co.uk/managingcontracts