Due Diligence - Getting the right deal for the organisation

This article regarding Payment by Results (PBR) and its impact on the voluntary sector makes for some interesting reading.

http://www.supplymanagement.com/news/2013/payment-by-results-seriously-flawed-says-charity-sector/

Two quotes in particular stand out for me:

"Implementing PBR effectively requires intelligent thought and carefully crafted incentives, but many PBR contracts fall well short of this. Crudely designed targets and contracts risk pushing expert voluntary sector providers out of public service provision"

and

"As PBR proliferates as a payment mechanism, it’s crucial that commissioners seek input from providers and service users on realistic targets and contractual terms at the very start of the process."

I recognise that the quotes in the original article could very well be taken out of context but the first quote reinforces the need for the purchasing organisation (who is making the commitment!) to be sure that the offering and the terms are not only fit for purpose but are effective and affordable.  Just because a government body or organisation has made the framework agreement it certainly does mean that it is suitable for all.  As with ALL procurement  and contracting agreements due diligence is essential.

The second quote reinforces the need for due diligence and this should not only be highlighted it should be at the forefront of every procurement specialists mind.

Procurement is a responsible function; enabling business strategy, providing value to client departments, reducing risk, ensuring compliance and key to driving financial compliance. It is NOT a rudderless spend machine. 

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