Each year, the Australian Government awards around 70,000 contracts with a total value between $50 billion to $70 billion. Managing these contracts well is important to make sure public money is spent wisely.
The Commonwealth Procurement Rules (2.10) explain that managing contracts and disposing of goods properly helps achieve the goals of procurement.
The Contract Management Guide (CMG) provides practical advice for Commonwealth officials who manage contracts. While the guide focuses on procurement contracts, it can also help with other agreements like grants, memorandums of understanding, and investments, since these often need similar management steps.
Australian Government Contract Management Guide
Finance updated the CMG to make sure it remains useful and relevant. These updates respond to key recommendations from the Australian Public Service (APS) Integrity Taskforce Report Louder Than Words: An APS Integrity Action Plan. The report called for better guidance on:
- setting binding milestones
- checking supplier performance
- getting legal advice for complex contracts
- making sure contract variations and extensions still deliver value for money.
The updates also reflect findings from the Joint Committee of Public Accounts and Audit Report 498: Commitment Issues – An Inquiry into Commonwealth Procurement. This report stressed that good contract management is needed to achieve value for money.
The revised guide was shaped by feedback across the APS. Consultations ran from February to August 2024 and hundreds of suggestions were considered. The result is a clearer and more practical guide that better meets the needs of officials.
The new CMG promotes a lifecycle approach to procurement. It includes more advice on contract types, documentation, risk management, and due diligence. It also gives step-by-step guidance for each stage of contract management, with a focus on:
- keeping value for money
- managing relationships with suppliers
- maintaining ethical standards.
For more information, contact the Procurement Excellence team via email at ProcurementExcellence@finance.gov.au.
