Open book contract management: following the public pound

Briefing_paper_open_book_FINAL

Summary

Half of the £187bn the government spends with third parties each year goes on contracted out services. CIPFA argues that the use of open book contract management would maximise the value obtained, share efficiency, strengthen corporate social responsibility and ensure transparency.

Format

PDF

Published

Mar 2015

Author

CIPFA

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Half of the £187bn the government spends with third parties each year goes on contracted out services. Open Book Contract Management (OBCM) is an approach for procuring and delivering services in the public sector in a way that can deliver cost savings and help drive savings from the contracting process. 

It is based on the principle of pain/gain share – both the client and the contractor ‘own’ the costs. If the costs are well managed, both client and contractor have the opportunity to share any savings. Both share the risk if costs escalate. OBCM therefore focuses on value for money – not just lowest cost. This CIPFA briefing looks at how OBCM is used, gives our position on supporting contracts through open book and invites the views of government, parliament, public bodies and their contractors on whether and how this approach to OBCM should be adopted.