8. Procurement and contracting
Strategic oversight of procurement and contracting is essential to ensuring commercial decisions support the project’s strategic intent and delivery model and continue to enable delivery of outcomes throughout the life of the project.
The SRO plays a critical role in setting the direction of procurement strategies, ensuring alignment with policy and probity requirements, and engaging early with commercial and legal advisors. The SRO must lead with clarity and align procurement with strategic outcomes for the project. This includes building strategic supplier relationships and setting clear role expectations for the partnership, including performance measures, and risk allocation. When procurement is delayed, overly rigid, or misaligned with delivery needs, it will introduce delivery risks and limit the project’s ability to respond to change.
For delivery teams, procurement and contracting processes directly impact how services are sourced, managed, and integrated into the project. Challenges often arise when contracts lack clarity, are overly prescriptive, or do not reflect the realities of agile or iterative delivery. Misaligned incentives, unclear deliverables, or insufficient contract management capability can lead to disputes, delays, and underperformance. Embedding commercial expertise within delivery teams, maintaining productive vendor relationships, and ensuring contracts as living documents that evolve with the project are critical to achieving successful outcomes.
Key lessons
Procurement lead times
Beginning procurement processes as early as possible supports delivery planning and reduces risk. Long lead times, unforeseen complexity and enough time to test market capability can all impact delivery. Underestimating this could compress delivery windows and increase risk.
Related actionable insights:
1 - Plan procurement early | 2 - Seek early legal advice | 3 - Review documents early
Timely legal advice
Legal support and advice influenced procurement timelines. Engaging and gaining timely legal advice took longer than expected and required additional time and budget. Planning ahead for this helped produce more robust approach-to-market documents and set the project up for success from the start.
Real life learning
The project undertook a complex and significant procurement relative to the size of the agency. Given the project scale and sensitivities, the team invested substantial time upfront working with legal advisers to develop a tailored contract and clearly defined requirements.
This early investment proved valuable as the contract remained largely fit for purpose over three years and provided the agency with clear levers to manage supplier performance and probity. However, the reliance on external legal support introduced higher-than-expected costs and added pressure to the procurement schedule.
As procurement complexity increases, investing in a robust contract becomes more critical, alongside careful consideration of potential cost and schedule impacts.
Related actionable insights:
2 - Seek early legal advice | 3 - Review documents early | 5 - Design flexible contracts
Contract flexibility
Contracts are more effective when designed with clear deliverables and enough flexibility to respond to change. Rigid contracts could limit innovation and responsiveness. Flexibility, while protecting the agency's strategic interests, helped manage changing requirements.
“Begin the process as early as possible. That for me starts when I’m speaking to the contracts branch – ‘Do we have an exemplar or a type of contract that allows me to go to market for certain services?’ ‘Have you got a contract that meets the requirement and is relevant?’”
Practitioner perspective
Related actionable insights:
4 - Build vendor partnerships | 5 - Design flexible contracts | 6 - Manage contract changes
Contract management clarity
Briefing delivery teams on contract obligations and responsibilities supported more effective supplier management. Clear understanding of key obligations, approvals, limits of authority and how these are reflected in the contract management plan helped teams work confidently with suppliers and manage issues as they arose.
Related actionable insights:
4 - Build vendor partnerships | 5 - Design flexible contracts | 6 - Manage contract changes
Actionable insights
- Start procurement planning early and set clear expectations with vendors.
Spend enough time identifying use cases and make sure they are reflected in the procured vendor solution. Set up arrangements that allow other service providers to be involved and collaborate to support a feasible solution design. - Engage contracts and legal teams for advice early in procurement planning.
Use their advice to draw on existing tools and frameworks, reduce lead time and leverage existing work. Early engagement also helps ensure the approach is legally sound and aligned with policy. Invest time upfront in document review.
Early scrutiny of procurement documents helps avoid delays, misalignment and contract amendments later. Make sure procurement reflects both strategic intent and operational realities.“A lot of effort upfront in reviewing procurement documents before they go out which saves a lot of time in the contracting phase - but allowing time for that process is really important.”
Practitioner perspective- Build strong vendor relationships and treat them as strategic delivery partners.
Set clear expectations, communicate openly and reinforce shared accountability. Strong partnerships enable faster problem-solving, better alignment with program goals and more resilient delivery under pressure. - Design contracts with built-in risk and performance management mechanisms.
Such as milestone payments, extension options and variations to accommodate evolving project requirements. - Actively manage change through structured processes.
Such as clear variation processes, review points, extension options, and transition arrangements. This is especially important in digital delivery where scope, sequencing, or delivery method may evolve.