New Zealand: Streamlined contracting between government agencies and NGO providers

It is getting easier for government agencies and NGO providers to document their arrangements.

As many will be aware, the Government's 3-year project 'Streamlined Contracting with NGO's' is due for completion in 2016. The project was preceded by a successful pilot in partnership with NGO providers in 2012.

Greater consistency

The overall goal of this project is to implement a consistent contracting framework for government agencies and NGO providers. Once completed, all government agency contracts with NGO providers should be transitioned onto the new contracting framework.

The 'streamlined' whole-of-government framework also aims to achieve the following benefits for both government agencies and NGO providers:

  • standardised terms and conditions;
  • a consistent and collaborative approach to procurement across agencies;
  • reduced legal oversight and associated cost;
  • reduced auditing / monitoring; and
  • a focus on measuring improvement in outcomes, rather than activity.

How it works

Each government agency will agree to use the new contracting framework by signing a Government Agency Agreement with the Ministry of Business, Innovation, and Employment (MBIE). MBIE is the coordinating agency for the project and will oversee the new contracting framework.

Government agencies then contract with NGO providers using the following suite of documents:

  • Outcome Agreement;
  • Framework Terms and Conditions;
  • Outcome Agreement Management Plan; and
  • Decision Support Tool.

Key legal documents

NGO providers should familiarise themselves with the Outcome Agreement and the Framework Terms and Conditions. Together, these documents contain all of the legal obligations that will exist between a purchasing government agency and a contracted NGO provider.

The Outcome Agreement is the only document required to be signed by government agencies and NGO providers. It specifies what is being purchased by the government agency, how much it will cost and any specific reporting obligations.

The Outcome Agreement can be tailored for individual engagements and should, where relevant, include variations to cover agreed approaches to unique elements. Examples of these elements might include ownership of intellectual property, sharing of confidential information and industry-specific conditions.

The Framework Terms and Conditions are incorporated by reference into the Outcome Agreement. They include provisions relating to usual contractual terms such as payment, dispute resolution, termination and indemnity. The Framework Terms and Conditions adopt default positions in most areas, but retain flexibility where necessary to ensure that engagement-specific details (which would not be standard across every contract government enters into with an NGO provider) can be included in the Outcome Agreement.

Advantages of the new contracting framework

From next year, by contracting with one government agency, NGO providers can be confident that the process and terms should be similar when contracting with another government agency. This should make negotiating and working with government agencies simpler.

The new contracting framework is also good news for government agencies.

The framework is outcomes-based, allowing government agencies to measure the effectiveness of contracted NGO providers more accurately across the board. Agency staff should also be able to use the new framework to more accurately assess risks, the form of contract and the approach to on-going management of their arrangements, while reducing duplication in contract management activities like audit, monitoring and reporting. And, by creating a consistent multi-agency approach to contracting, staff moving between government agencies who are familiar with the contracting framework should be able to apply this knowledge again, irrespective of their role or department.


Government agencies have already begun the transition process and they will continue to contact the relevant NGO providers to shift contracts onto the new framework in time for the end of the 2015/16 financial year.

Ultimately, it is hoped that the new framework will assist government agencies and NGO providers to work together in a more efficient, collaborative, coordinated and connected way.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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