How to award a contract when you buy services
- Government Digital Service
- Part of:
- Digital Marketplace buyers and suppliers information and Central government efficiency
- 18 April 2016
- Last updated:
- 8 May 2017, see all updates
How to award a contract when you buy services through the Digital Marketplace.
You can only enter into a contract (or ‘call-off’) with a supplier who’s been accepted onto either the G-Cloud or Digital Outcomes and Specialists framework (an agreement between government and suppliers) on the Digital Marketplace.
Before you enter into a contract
If you have concerns about the supplier’s financial position, you can choose to do financial checks on the supplier before you award the contract, for example run an Experian credit check. Discuss the results with the supplier if you have any concerns.
What’s an order form and when to use it
The order form is part of the contract. This is the part that you and the supplier fill in when you’ve agreed certain details. It includes:
- whether the supplier will provide a cloud or digital specialist service (depending on the framework)
- the terms under which the supplier will provide a service
This can help you highlight things like invoicing arrangements or additional terms and conditions to potential suppliers.
Filling in an order form
You have to generate a purchase order (PO) number from your internal payment or ordering system. Once you have this, you and the supplier should complete the order form.
Order forms vary between frameworks. They can ask for details of:
- the buyer and the supplier contact details
- the agreed service start and expiry date (maximum 24 months)
- the service description
- the quantity of the service required
- the total contract value (including a breakdown of smaller costs) and how to pay
- service deliverables, for example what needs to be done, and by when
- things that must be completed before the service can go live
- the supplier’s liability and insurance
- the terms and conditions under which the supplier will provide their service
- notice period for ending a contract
- commercially sensitive information
- third parties
- staff vetting procedures
- where the services will be delivered
Both you and the supplier need to sign the contract before the supplier can start work.
How to use an exit plan
You can agree an ‘exit plan’ with the supplier when you award a contract. You do this using a statement of work. This could help if you need to end your contract early.
You may need to include:
- any assets you’ll need back
- any buyer staff training you need as part of the handover of work
- anything a new supplier will need from your existing supplier
The supplier can update the exit plan during the contract if needed.
Optional deed of guarantee
You can use a guarantee if you:
- have concerns about the financial standing of a supplier
- want reassurance that another organisation can fulfil the supplier’s obligations if the original supplier can’t
The G-Cloud framework contract
The G-Cloud 9 contract includes the order form, terms and conditions and 6 parts called ‘schedules’ which are:
- a section about your services
- a section about the call-off contract charges
- a collaboration agreement
- alternative clauses you can use
- a guarantee
- a glossary and interpretations
Read all the G-Cloud legal documents.
When to start work after signing a contract
Suppliers should ideally start the agreed work within 3 months of signing the contract. This is because:
- other suppliers might lower their prices or new services may become available
- your requirements might change
- services might be removed from the Digital Marketplace
Extending your contract
The maximum length of a G-Cloud contract is normally 24 months.
If your requirements don’t change much, you may be able to change what you’re buying through G-Cloud 9 as long as it:
- doesn’t increase the value of the contract by more than 10%
- isn’t a substantial change
If your requirements change, you should cancel the contract and start the buying process again. This means you’ll find the service that meets your requirements, at the best price.
The Digital Outcomes and Specialists framework contract
The Digital Outcomes and Specialists 2 contract includes the order form, terms and conditions and 8 parts called ‘schedules’ which are a:
- section about your requirements
- section about the supplier’s response to your requirements
- section about statements of work
- contract change note (CCN) template
- balanced scorecard
- section about your optional terms and conditions
- section about the bidding process
If you bought services through Digital Outcomes and Specialists 1, you’ll need to use the Digital Outcomes and Specialists 1 contract.
If you’re using a fixed price contract, you’ll need to know how much any extra work will cost. You should ask for day rates for each role in case the supplier has to do any unplanned work outside the contract. These rates should be included in the contract.
Read all the Digital Outcomes and Specialists legal documents.
When to start work after signing a contract
For Digital Outcomes and Specialists, the contract expires a month after the buyer and supplier sign the contract if:
- the supplier hasn’t started the work
- a statement of work hasn’t been signed
If your requirements change, you must cancel the contract and start the buying process again. This is so you can find a service that meets your requirements at the best price.
There are some contract changes you can make. You can increase the:
- original initial length time period of the contract by up to 25%
- value of a statement of work by up to 20%
Paying for services
Payment for services is determined by ‘statements of work’, which outline:
- what you’ll get
- the main people involved
- a breakdown of costs
- contract expiry dates
Published: 18 April 2016
Updated: 8 May 2017
- Updated to include G-Cloud 9
- Added information about an exit plan
- Updated to clarify what to do if your requirements change.
- First published.