How the Government contracts with Community Organisations

Contracting with Non-Government Organisations

The Beehive 

The government has realised the need to improve the way all government departments relate to and purchase services from the community sector. Part of the response was for Treasury to produce guidelines that were intended  to develop contracts to the 'mutual benefit' of both the Government and the NGOs.

 "It is also important that Government agencies recognise that the Government's relationship with an NGO normally extends beyond the requirements of the contracting process. Some Government agencies are now heavily dependent on NGOs for the provision of services, and NGOs can be important sources of innovation, information, and useful policy and operational advice. Where these relationships exist, the Government agency concerned needs to see contract management in terms of supporting the wider relationship with the NGO sector.''

A number of principles underpin these guidelines:

Principles of Good Contract and Funding Management

  • Services purchased through contracts and other types of funding relationships should contribute to the achievement of Government outcomes and objectives NGOs will similarly expect contracting arrangements to contribute to the achievement of their objectives.
  • Contracting should reflect the needs of the ultimate users or recipients of the service
    Contracts should provide appropriate accountability for public money
    The information required is likely to vary depending on the amount of money involved.
  • Contracts should represent value for the public money
    The taxpayer should obtain the appropriate quality and quantity of service, and pay a reasonable price, for services that are effective in contributing to the achievement of the desired outcomes. The quality of service delivery will usually be of central importance.
  • The Crown and its organisations should act in good faith
    Acting in good faith requires actively consulting NGOs about their needs and views, considering what to do about what NGOs suggest and providing relevant information that helps NGOs to approach issues in an informed manner. In short, it is a "no surprises" approach which will help build up trust.
  • The Crown should act in good faith in its dealings with Iwi and Hapu, and ensure that decisions it takes are well informed, which will usually imply a requirement to consult with Iwi and Hapu in those dealings. Where a service has been developed with Maori explicitly as Treaty partners (as opposed to a service delivered to Maori as citizens) there will be an added dimension to take account of Treaty partnership.

Government agencies should understand the nature of the organisations they contract with. Contracting and funding relationships with the community organisations should be consistent with the relationship the Government seeks to have with the community and voluntary sector.

It is expected that all Government Departments purchasing services on behalf of the crown, including District Health Boards will use these guidelines.

The Guidelines are available in on line http://www.treasury.govt.nz/publicsector/ngo/default.asp or in hard copy by contacting Treasury on 04 4722733

Principles to underpin management by public  entities of funding to non-government organisations is the latest good practise guide from the Controller and Auditor General and provides clarity about expectations for all sides of the funding relationship.

Given the significant amount of  resources, guidance and advice that exists for public servants about how to contract effectively with the community sector it is disappointing that so many fail to achieve competent and fair relationships  with community agencies.

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