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Serco and G4S Review Results

The government has published their Review of Major Contracts, instigated as a result of anomalies in audit of Serco and G4S contracts earlier in 2013.

After the negative press that both companies have received, the Review "found no evidence of deliberate acts or omissions by either Serco or G4S leading to errors or irregularities in the charging and billing arrangements on the 28 contracts investigated within this Review." The contracts involved in the review were Foreign and Commonwealth Office, Home Office, Ministry of Defence, Single Intelligence Account and Departments for Work and Pensions, Transport,  Education and Business, Innovation and Skills.

Some issues were identified around key controls applied to invoicing and payments, and DWP are already implementing further testing of Work Programme contract management. Some good practice was identified within contract management but in the majority of contracts weaknesses were identified with the contract management.

Interestingly, it isn't just Serco and G4S that come in for criticism, with the report clearly highlighting  the general over-reliance on supplier’s self-reporting their performance with insufficient verification checks being performed by the Department. It also highlights key performance indicators which Departments do not monitor or measure and which often don't relate to the intended outcome of the contract.

It will be interesting to see how the report recommendations impact on wider contract managment activity by individual departments in 2014 and beyond.

The tandem Contract Management Review conducted by the Ministry of Justice across their contracts resulted in similar findings. The Transforming Rehabilitation contracts will no doubt be influenced heavily by these findings.

20 December 2013

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