Process Step 3:

Contract

The third Process Step, Contract, provides tools to achieve a successful, ‘win-win’ contract with a chosen vendor.

In this Process Step you will learn:

  • The critical success factors for contracting
  • The process for successful outsourcing arrangements
  • What a well-written request for proposal and service level agreement contains

This Process Step, Contract will guide you through the contracting process for outsourcing arrangements beginning with the critical success factors for contracting. You will then learn a nine-step contracting process which has been successfully adapted from lessons learnt in the private sector. It includes steps such as appointing a skilled contracting team, initiating the bidding process, aligning important stakeholders and hosting a kick-off session. Contract concludes with a deep-dive vendor assessment process to select and appoint the successful vendor. This third Process Step also includes a template for a request for proposal (RFP) and examples of service level agreements (SLA).

To complete the Contract Step you will need to work through:

Critical success factors for contracting

Nine-step approach to successful contracting

Templates and examples

Contract will help you:

  • Determine the commitment by senior management to the development of an RFP
  • Identify and appoint a contracting team
  • Initiate the bidding process that includes the issuance of the RFP
  • Selection and appointment of the successful vendor by the ministry of health and associates

During Contract you will undertake the following activities:

  • Collect data for the development of the RFP
  • Define RFP requirements
  • Align stakeholders
  • Conduct a kick-off session
  • Issue RFP package
  • Receive questions and provide responses
  • A deep dive vendor assessment process

The Contract Step requires you to form a contracting team.

The contracting team needs to manage and conclude a successful vendor selection process negotiation and appointment of a chosen vendor. Key activities for the team include:

  • Develop an outsourcing brief
  • Finalise an RFP
  • Consolidate outcomes of the initial Vendor Assessment Matrix
  • Negotiate and select the vendor for outsourcing

The below team design is suggestive - other departments or skillsets may be involved as required.

Department or skillset

Required for process steps (Yes/No)

Typical role

Requisite responsibilities

Policy and planning

No

Chief Planning Officer

  • N/A

Procurement

Yes

Chief Procurement Officer

  • Approves vendor selection in line with functional need

Finance

Yes

Senior Finance Officer

  • Conducts side-by-side vendor cost evaluations

Logistics agency

Yes

Director of the Central Medical Store

  • Leads steering committee for contracting project team
  • Interviews vendor management teams, benchmarks references
  • Develops key performance indicators to regulate contract

Logistics: functional supply chain

Yes

Functional activity specialist

  • Supports head of logistics agency in respect to vendor assessment matrix

Provincial logistics agency

Yes

Provincial Health Officer

  • Conducts vendor assessments and shortlisting with respect to provincial requirement with support from the head of logistics agency

Local logistics agency

No

District Health Officer

  • N/A

Enabler departments - legal, human resources, technology

Legal

Legal Counsel Human Resource Director IT Director

  • Contracting expert drafts vendor agreement, term sheet, service level agreement (SLA) for final sign-off
  • Input KPIs in final contract

At the end of the Contract Step you will know:

  • What capability and contracting expertise exists within the ministry of health
  • Whether tender documents and RFP formats are fit for purpose
  • If contract procedures are achieving the right outcomes
  • Understand what is needed to strengthen contracting principles and processes