Since the creation of the US government Stimulation Package, or American Recovery and Reinvestment Act 2009 to be precise, there has been a noted increase in activity and interest in the discipline contract management. Interest in Contract Management has largely been driven by pressure from the public to force government agencies to provide greater transparency and justification for the vast sums of taxpayer’s money being spent to bolster the fragile economy.
It may have been a coincidence, but the topic of contract management in the military has also come to the fore in recent weeks, with the publishing of a highly critical report by the Wartime Contracting Commisssion on the wastage of public funds in Afghanistan and Iraq, where billlions of dollars have been unaccounted for and certain defense contractors, like KBR Inc., have scooped millions of dollars in performance bonuses because of poor contract oversight.
“One example of wasted money cited by the commission involves construction of a $30 million dining facility at a U.S. base in Iraq scheduled to be completed Dec. 25. The decision to build it was based on bad planning and botched paperwork. Yet the project is too far along to stop, making the mess hall a future monument to the waste and inefficiency plaguing the war effort”, says Richard Lardner of the Associated Press. The US Army is due to withdraw from that location before that date.
With a bit of luck, increased visibility in to contract management issues at these governmental levels will be akin to new technological developments in the car industry through Nascar or Formula One, where the benefits technological developments infiltrate down to production vehicles; so in the world of contract management, hopefully greater attention on contract management issues at a governmental level will infiltrate down to other government organizations on a local level, and companies in the private sector.
The role of Contract Management software in Government contracting oversight
Contract Management in the public sector remains a largely manual and inefficient process. President Obama and the UK government have already gone on record in recent months bemoaning the lack of skilled and qualified resources to provide effective contract oversight needed to track government contracting.
Contract Management software solutions are not, in general, designed to eliminate people from the contract management process, but can provide significant efficiency gains and greater management information to allow more effective contract oversight and management.
Contract Management systems effectively allow organizations to track and manage contract obligations, spending and commitments, as well as helping to streamline the contract drafting, review, external negotiation and archiving process.
Many people and organizations understand that they need to manage and control their contract processes more effectively, but few are aware that there are robust technology solutions to streamline this effort. Contract Management software systems should generally provide the following core areas of functionality:
- Contract Authoring, to streamline the contract creation process
- Internal approval workflows
- Central electronic contract repository
- External secure workspaces for contract negotiation
- Reporting and analytics, to track and manage contract milestones and commitments
With greater attention on where and how taxpayer’s money is spent, government agencies that contract with external parties to provide services to the public will need to become much more efficient in the way that contracts are created and managed in the future.