To deliver its programs, the Australian Government awards on average 70,000 contracts each year with an annual total value in the range of $50 billion to $70 billion.
Good contract management is an essential component in achieving value for money for Australian Government procurements. The Commonwealth Procurement Rules (2.10) state that “the ongoing management of the contract and consideration of disposal of goods, are important elements in achieving the objectives of the procurement”. While this guide replaces the Australian National Audit Office’s Developing and Managing Contracts Better Practice Guide, it has been refocused to provide practical process guidance at a practitioner level for Commonwealth officials who manage contracts.
This guide is primarily for the management of procurement contracts. It may also be useful for other arrangements such as grants, memorandums of understanding (MoU), investments, as such arrangements generally require similar management activities to the processes in this guide.
Finance has updated the Contract Management Guide (CMG) to ensure it remains a fit-for-purpose reference for Commonwealth officials managing contracts.
These updates respond to key recommendations from the APS Integrity Taskforce Report Louder Than Words: An APS Integrity Action Plan, which called for stronger guidance on establishing enforceable milestones, monitoring supplier performance, seeking legal advice when developing complex contract requirements, and ensuring contract variations and extensions deliver value for money. The updates also reflect findings from the Joint Committee of Public Accounts and Audit (JCPAA) Report 498: Commitment Issues – An Inquiry into Commonwealth Procurement, which emphasised that value for money cannot be achieved without effective contract management.
The revised CMG incorporates feedback from extensive stakeholder engagement across the APS, with consultation running from February to August 2024. Hundreds of proposed changes were considered, resulting in a guide that is clearer, more practical, and better aligned with the needs of officials. The new version promotes a lifecycle approach to procurement, rather than a linear one, and includes expanded advice on contract types, documentation, risk management, and due diligence. It also provides more practical guidance at each stage of contract management, with a focus on maintaining value for money, managing supplier relationships, and upholding ethical standards.
Download
Contact
Contact us via email at: ProcurementExcellence@finance.gov.au.
