On procuring for outcomes, payment by results and contract management.

Visualise preparing a tender and clearly stating the outcomes to be achieved.  Then having a few bidders who all look as if they satisfy the qualifying criteria, one of the providers stands out from the others in achieving a social outcome which you view as being completely consistent with the buying organisations long-term objectives.  You award the contract to that provider.  As the awarder of the contract you assume robust contract management will be used to ensure the promised outcomes are delivered.  If you're an unsuccessful bidder you watch carefully believing that the provider is being closely managed to ensure that the promised USP is realised.  I'm sure you could all right the script.

It's a long-term contract for a big event.  Nevertheless the first round of competition is winning the right to deliver the event,  the second round is about the event itself, which is actually a series of sporting events, all bound by entry criteria and rules which are strictly adhered to.  If you don't satisfy the criteria you're out.  Even worse, at the actual events, you're found to have taken an advantage which enhances your performance, even if you won the event, you are stripped of your title and publicly disgraced.

The events take place on a regular cycle and sometimes the event covers an array of activities, say a batch of football matches, sometimes it's a batch of running events, and sometimes it's a whole range of sporting events.  I'm sure've identified the events now, the Olympics, Paralympics, FIFA World Cup, Athletics World Championships, etc.

So what do we make of a situation where the UK win the 2012 Olympic bid saying they will deliver an outcome of a sports legacy inspiring young people to play sport - two million more people active by 2013.  Such a legacy could have reduced NHS costs and also potentially crime costs, therefore could be part of deficit reduction.  So what do we do when monitoring the stated outcomes we find a decline as opposed to rise?  We can't blame it on the Japanese earthquake and tsunami, the Royal Wedding, and even the eurozone crisis may be stretching it, ...

Oh no, the provider has changed the rules, it's no longer achieving an outcome but going for 'payment by results of it's domestic subcontractors'.

So next month the new policy will be announced by the provider, not the client.  As a procurement person, advising the client, as opposed to the contractor, what would you advise?  As someone advising on future awards, what would you advise on review of previous performance in delivery of outcomes?

Background reading:
O'Connor, A. '2012 legacy plan for a fitter Britain is quietly scrapped', The Times, 2 December 2011, pp.12-13.