Procurement Journey
Route 1 Contract and Supplier Management
Route 1

Contract and Supplier Management

PLEASE NOTE: THIS PAGE IS UNDER MAINTENANCE

Purpose and Scope

Route 1 -  Contract and Supplier Management (CSM) is for contracts that are low value or low risk (or both).

 

Why CSM Matters

CSM s much more than administration. It is the bridge between awarding a contract and delivering the value from it. 

Good CSM:

  • enhances value for money
  • reduces risk of supplier non-performance, poor service or cost creep
  • supports innovation, continuous improvement and strong supplier relationships
  • ensures compliance with legal/regulatory obligations

The supplier’s performance should be managed throughout the lifetime of the contract to make sure they deliver the quality, service, cost and delivery identified in the contract award.

By managing the contract well, you can:

  • avoid contract surprises or escalating costs
  • make processes more efficient
  • manage changes more easily
  • ensure full and prompt payment to and through the supply chain

Quickfire Guide

Quickfire Guide

Roles and Responsibilities

Role

Responsibility

Examples

Contract Owner

Accountable for overall contract delivery
  • oversight of KPIs
  • budget holder[
  • escalation

Contract Manager

Day-to-day management of supplier relationship
  • monitoring performance
  • recording variations

Contract User

Orders and/or receives goods or services
  • Ordering IT consumables only from the contracted supplier
  • Reporting delayed deliveries or poor service to the contract manager

Procurement / Commercial Team

Provides professional procurement advice
  • approvals
  • legal compliance
  • change control

Finance

Payment controls and budget monitoring
  • invoice approval,
  • compliance with terms

Supplier

Deliver goods/services in line with contract
  • meet KPIs
  • provide reports
  • provide management information/data

 

Contract Manager

The Contract Manager is, Ideally, one person (or small team) should be responsible for the contract. This helps with continuity, relationship building and knowledge retention.

The Contract Manager may not be the same person who awarded the contract, this can be beneficial because it allows fresh oversight.

Their responsibilities should be clear: roles, accountability, resources and time commitment should be defined

The level of engagement should be proportionate to risk and value. For example:

Contract is low value, low risk to your organisation and there are many other substitute suppliers available e.g.  cleaning services for a small office area

The contract manager may not need to stay in regular contact with the supplier. 

The contract may effectively “run itself” with no issues and therefore the Contract Manager may decide to have a monthly (or quarterly) supplier call to go over any updates.

Contract is low value but high risk to the organisation e.g. IT software

The contract manager will be more involved to avoid issues and problem solve. 

For example, they may have weekly meetings, weekly reporting and regular supplier visits.

It is good practice for the contract manager to publish, in advance, a schedule to the supplier and those who will be involved in the operation of the contract.

This schedule could include the contract management activities, including objectives and Key Performance Indicators (KPIs) and ensure that these are an embedded part of contract management activities from the beginning.  For a Route 1 contract, which is low value, low risk (or both) this schedule can be very brief.

 

CSM Key Steps

These steps should guide staff through what to expect and what their responsibilities are at each stage. 

This should help staff avoid missteps such as unapproved extensions or inadequate monitoring. 

Please note that the activities listed below are comprehensive and do not all have to be applied at once. Contract managers should make sure that the CSM activities used are proportionate and relevant to the contract that they are managing.  

Please note that a document containing all of the key steps is available for you to download at the bottom of this page.

1. Before the Contract Starts

 

Suggested Responsibilities/Considerations

Why it is Important

  • understanding requirement specification/contract scope and deliverables
  • confirm roles and responsibilities
  • review contract documents, KPIs and reporting requirements
  • involvement of procurement
  • risk assessment
  • financial checks
  • it’s the bridge between procurement and delivery
  • ensures both buyer and supplier understand what’s been agreed, what needs to happen next, and how performance will be measured
  • prevents confusion or misalignment once the contract goes live
  • makes sure the supplier is ready to deliver as promised from day one
  • confirms pricing structures, invoicing processes, and performance measures are clearly understood
  • avoids costly misunderstandings, disputes, or delays later in the contract
  • reduces operational disruption when switching from an outgoing supplier or starting a new service

2. Contract Award / Handover

Suggested Responsibilities/Considerations

Why it is Important

  • ensuring documentation is correct and accessible (contract, terms, annexes)
  • contract handover—who does what – complete a contract handover document (a template can be found at the bottom of the page for you to use)
  • ensure contract documentation is accessible.
  • complete handover checklist (a checklist document can be found at the bottom of the page for you to use).
  • once the handover is complete, responsibility for day-to-day performance management sits with the contract manager, with procurement available for advice and escalation.
  • avoids gaps in knowledge or responsibility
  • transfers all key documentation, risks, decisions, and supplier commitments to the contract manager
  • makes sure everyone understands the contract’s intent, scope, and deliverables before work starts
  • establishes who will manage, monitor, and approve key activities
  • confirms reporting, meeting structures, and escalation routes
  • ensures the right oversight mechanisms are in place from day one (e.g., performance reviews, KPI tracking)
  • sets up systems for invoicing, reporting, risk logs, and performance data
  • confirms all insurances, financial checks, and onboarding requirements are complete
  • makes sure the contract is stored in the right system and accessible to relevant teams
  • reduces the likelihood of early-stage delivery problems or compliance failures

A CSM Handover document and a CSM Handover Checklist are available for you to use, these can be found at the bottom of this page.

3. Monitoring and Reporting

Suggested Responsibilities/Considerations

Why it is Important 

  • for low-risk contracts, monitoring may simply be occasional check-ins and good recording-keeping. Before continuing, consider how much management your contract needs.
  • schedule regular performance meetings (agree frequency of reporting – e.g. monthly, quarterly etc.)
  • what performance data should be tracked (cost, time, quality, supplier risk etc).
  • track KPIs, SLAs, and delivery milestones.
  • record issues and actions taken.
  • maintain accurate records for audit
  • consider how to capture benefits / savings / sustainable outcomes achieved
  • ensures continual oversight
  • allows identification of trends or issues early
  • confirms that the supplier is delivering the goods, works, or services as specified in the contract — on time, to the right quality, and within budget
  • highlights early if there are any deviations, delays, or performance shortfalls
  • keeps both parties accountable to the agreed Key Performance Indicators (KPIs) or Service Level Agreements (SLAs).
  • without monitoring, you’re managing on assumptions — not evidence
  • regular reports provide clear data on performance, costs, and outcomes
  • enables managers to make informed decisions about renewals, extensions, variations, or corrective actions
  • creates an auditable trail showing how performance was managed and value was achieved
  • confirms that payments are linked to actual performance and outcomes
  • encourages suppliers to focus on continuous improvement and efficiency
  • regular reporting and performance reviews create open communication channels.
  • encourages collaboration, transparency, and shared problem-solving
  • builds trust and helps maintain a positive working relationship — even when issues arise
  • demonstrates that the organisation is managing contracts responsibly, in line with policy, audit, and statutory requirements (e.g. procurement regulations, public spending controls)
  • provides assurance to senior management and auditors that contracts are being managed effectively
  • enables tracking of trends over time — spotting patterns in performance data and identifying opportunities for improvement
  • encourages innovation and better value through lessons learned and supplier feedback

 

 

  •  

4. Variations / Extensions / Amendments

Variations (changes to requirements) and extensions to the contract should be exceptional, not routine.

Contract variations should only be permissible where changes do not significantly alter the original contract’s scope, value or duration.

A significant change could be to the:

  • contract scope;
  • contract value;
  • contract duration.

If a proposed change is significant (change in scope, large value increase, much longer duration) then you may need to conduct a new procurement exercise.

If you are unable to estimate the value of a contract that contract will be explicitly made subject to the procurement rules.

If a significant change to the contract is proposed, you must contact your local Procurement Function or Centre of Expertise for advice on how to proceed before making changes.

Suggested Responsibilities/ConsiderationsWhy it is Important
  • when permitted,
  • process to follow - all changes must follow formal change control procedures
  • procurement must be involved in significant amendments
  • escalation should be earlier for high-risk/strategic suppliers, and proportionate
  • variation, extension, or amendment changes the terms of a legally binding agreement
  • proper management ensures changes are authorised, documented, and compliant with procurement and governance rules
  • prevents disputes or claims later about what was or wasn’t agreed
  • without a formal process, even small changes can invalidate parts of the contract or create ambiguity
  • public sector organisations must show that all contract changes are fair, transparent, and traceable
  • clear records of variations support audit, governance, and reporting requirements.
  • demonstrates accountability for decision-making and use of public funds
  • A structured variation process creates documented evidence of:
  • what changed and why
  • who approved it;
  • when it was implemented
  • the impact on cost, scope, and delivery.

This is vital for governance, risk management, and lessons learned.

A Contract Variation Request Form is available for you to use and can be found at the bottom of this page.

Case study

Case study

Low-Value / Lower-Risk cCSM

Education Authority Northern Ireland (EA) – Food supply contracts

The EA’s Commercial Procurement Service establishes several food contracts supplying ~145,000 school meals daily across Northern Ireland. 

While the total contract value is large (£20 m annually for food contracts) the individual product lines / supplier risk levels are relatively moderate (many standard food items, multiple suppliers). 

Key supplier management / contract-management practices used:

  • Supply-chain mapping: tracing the origin and tiers of supply so that risks (geopolitical, logistic, regulatory) are visible.
    • Dual-sourcing / substitute planning: having backup suppliers or substitute products to reduce risk of supply failure.
    • Early market engagement to assess capacity, continuity of supply, and contractual terms (price-indexation, review clauses) before awarding.
    • Incorporation of human-rights, modern slavery due-diligence clauses—even for relatively standard supplies. 
Outcome: 

Developing and managing constructive and transparent relationships with suppliers ensured that food contracts were successfully executed with minimal disruptions, maximising value for money through improving supplier performance and lowering costs.

Why this qualifies as “low risk / lower value” (relatively): 

The items are standard consumables (food items) with multiple supply sources rather than unique or high-tech components; supply risk is managed via substitution and mapping; contract terms are straightforward and have resilience built in.

Key Message: 

This shows how even for standard, moderate-value contracts you can build in structured supplier management and contract clauses to reduce risk and improve performance.

This Case Study is available in the public domain,  The full case study can be found at:

Case Study for Supply Chain Resilience - Food Contracts | Education Authority Northern Ireland

Quickfire Guide

Quickfire Guide

Have You Got Everything You Need?

Before carrying on, please check you've got everything you need.

  • Scope of responsibilities are identified;
  • A documented contract management process is in place.

Organisations should build into their contract management activities sufficient checks to ensure suppliers are meeting their obligations under the General Data Protection Regulations (GDPR).

If obligations are not being met, organisations should take urgent remedial action with the supplier to address issues and risks. 

Back to top