Writing contracts and managing a contract
What should be in a school's contract with their supplier, and how they should manage them throughout the buying process.
You should get legal advice before entering into a contract.
Contracts should include:
- a detailed description of the goods, works or services you’ve agreed to buy, linked to your specification
- a pricing schedule – what will be paid when
- terms and conditions
- the level of service you want
- any contract management arrangements such as regular meetings or contact
- an ‘implementation plan’ saying who is responsible for what – for instance if you’re buying ICT equipment, who’ll do the cabling and install it
- what happens at the end of the contract
- your specification as an appendix
If your supplier is employing another company to do some or all of the work, it’s the supplier’s responsibility to make sure they have the appropriate:
- health and safety policies
- insurance
- professional qualifications
- certification
Make sure that it is clear in the contract. You may want to seek legal advice on sub-contractor warranties.
Suppliers might ask to change your contract’s terms and conditions or use their own.
If it’s important to you to use your own, you should state this in your invitation to tender.
Check that the signed contract the supplier sends back to you is exactly the same as the copy you sent them. The last copy of the terms and conditions sent by either side is the one that is legally binding, so make sure that you are the last to sign.
Decide the level of service you want from the supplier.
You may want a service-level agreement (SLA) with them as part of your contract, especially if there will be ongoing support or maintenance.
The supplier may offer you a pre-set SLA as part of the contract. You may want to adapt this or write your own, but some suppliers will charge extra for that.
Your contract should also include ‘key performance indicators’ (KPIs). These monitor how the supplier is performing. Good KPIs should:
- set targets – such as things you need fixing within a specific time
- set the quality of service you want – such as timeliness or reliability
- set the level of service you want
- be measurable
- help you check you are getting value for money
- specify what happens if the service is poor – such as money back
Make sure you already collect the information you need to monitor your KPIs. If not you’ll need to set up new systems for this, or get the supplier to do it.
Review the KPIs with the supplier as part of regular contract update meetings.
Include an exit strategy in complex, high-value or high-risk contracts. It should set out:
- what everyone is responsible for if the contract expires after its specified completion date, you end the contract early or you end the contract with immediate effect
- who owns what at the end of the contract
- what information the supplier will provide, by when and under what circumstances
- what access the supplier will allow to procedures, systems and people, and when and how they will allow it
- what the supplier will do to support the contract ending
- how long the supplier will give support while you change to a new supplier
- who pays for what, by when and how
- under what conditions either side can end the agreement – such as if the supplier does not meet the service level agreement, there are changes in circumstances or there is any misconduct
Plan how you’ll manage your contract. Include:
- who is responsible for what
- how you’ll monitor your key performance indicators
- timescales for resolving problems or poor performance
- having regular meetings with the supplier
- procedures for raising problems and resolving disputes
- how to make changes to the contract
- which of your staff will be involved
- payment terms
- an exit strategy
- how you will monitor the supplier’s financial stability
You should have plans in place for if things go wrong, such as if your supplier becomes insolvent.
You should have regular meetings with your supplier to discuss:
- the progress on any work
- where they are doing well
- any problems and what to do about them
- any changes that are needed
- planned maintenance
- upgrades or improvements
Keep notes of the meetings, including anything you agree to do and when it will be done. Share the notes with your supplier.
If they take the notes make sure any agreements you make are in there.
If you need to make any changes to the contract use a variation agreement.
Contracts will have rules on variations in them, so check first. We recommend that you get legal advice.
If you included an option to extend your contract in your original invitation to tender, you can extend it for the length of time you set, using a variation agreement.
If you did not include this option, you can only extend in certain circumstances. Seek legal advice or contact the Department for Education (DfE).
Plan for the end of the contract in advance, including:
- returning the supplier’s equipment
- ending any joint arrangements
- getting rid of unwanted items
If you want to end the contract early, follow your exit process. Make sure there is a termination clause in your contract.
Do a formal review at the end of the contract. Talk to people involved and if it’s appropriate, people who used the service or product. Look at how the supplier performed and what you’ve learned.
Keep a record so others handling contracts can take it into account.