Contract conditions are much more structured than those for
grants, they tend to be less flexible and charities are held
accountable for their delivery. Contracting to provide services
inevitably carries risk. If your organisation breaks a contract
you may have to pay compensation for failure to deliver a
service.
Contracts are a serious matter - you'll need to be up to
speed with the following skills:
Negotiating skills
Consider and discuss every clause in the agreement you are
being asked to sign. There is no such thing as a 'standard'
contract - even if a local authority says there is! If you
want something reworded, or deleted, explain your reasons
calmly and listen carefully to the purchaser's reason for
wanting it their way.
Talk to other voluntary organisations which are also negotiating,
and use your local Council for Voluntary Service as a collective
campaigning network - see resources.
Expert view
Tamara Essex, Contracts and Partnerships expert, talks about
working with the local authorities.
Purchasers may give a lump sum for a service, based on your
budget, or may require you to unit-cost your services and
purchase on that basis, see working
out your unit costs.
Setting quality and quantity targets
In the contract or service agreement specification, you
will be asked to commit to a certain amount of service - number
of units - and to certain quality standards. Make absolutely
sure you can deliver the agreed number of units, even when
staff are on annual leave or off sick or on maternity leave
- you'll need a contingency plan and a contingency budget
for this. You should also ensure that you have your own internal
systems for monitoring quality - spot-checks, supervision,
good written management systems - so you can demonstrate how
you know that high quality standards are being maintained.
Video view: Black Orchid
See how Black Orchid renegotiated their service level agreement
with a local authority.
It's natural for voluntary organisations to feel dependent
on a local authority or other funder. But if you provide a
quality service and it aligns with local 'purchasing priorities'
the relationship is really one of inter-dependency. If you
think of it in these terms, you will have the courage to argue
against unreasonable contracts.
Don't allow yourself to be bullied by threats that a service
can be obtained elsewhere, but know your local market so you
can work out your strength in the field. And consider collaborating
with other organisations so that you don't overlap and compete
with each other.
Getting advice
It's important to get proper legal advice before entering
into any agreement to deliver services. The management committee,
in particular, need to be aware of all the implications of
entering into an agreement as ultimately any problems will
be their responsibility - see negotiating
flexibility.
Contract negotiation is demanding and time-consuming, but
remember you are not alone. Get advice from your local Council
for Voluntary Service or Community Care Forum - they can help
you argue against unfair clauses, and they can provide training
to help you with the skills of unit costing, contract negotiation
and quality assurance. Also draw on the experience of voluntary
organisations in other counties or local authority areas.
Entering a partnership
If you are unhappy about any aspect of a contract or partnership
agreement, don't sign!
Partnerships can be anything from a loose grouping of organisations
working co-operatively, through a formal consortium with its
own constitution but retaining the constitutional autonomy
of its member agencies, to a formal merger. Choosing the right
model to meet the needs of the partner agencies is essential
- see building a partnership.
It is easy to become diverted by practical considerations
and to lose sight of the end purpose. So keep the essentials
in mind:
Will the partnership help your organisation to deliver
its core mission?
Will it strengthen your organisation?
Will it ensure your organisation's financial viability?
Will it provide renewed energy for meeting the needs
of your users?
Partnerships work best when they are entered into freely,
rather than being imposed to avoid cuts. All partners need
to recognise the added value of working together - even if
it means giving up a small degree of autonomy there are still
gains for all concerned, especially the service-user. They
should benefit from greater choice, a wider range of services,
and smoother movement between them.
Video view: RS Health
See how RS Health developed partnerships with other HIV
organisations and looked for a partnership with a commercial
organisation.
