Service Delivery Model Transforming Contract Management
Transforming Contract Management to Support Complex Outsourced Service Delivery
Grosvenor partnered with a Victorian local council to redesign and implement a future-state contract management operating model. This enabled the successful transition to a multi-supplier maintenance services framework. In addition, it strengthened governance, supplier performance and long-term commercial outcomes. This project demonstrates how the transformation involved in managing contracts, or transforming contract management, can support better results for councils.
Situation
This Victorian local council was undertaking a major transformation of its maintenance services delivery model through the implementation of its Future Maintenance Services (FMS) contracts. The new model introduced significant changes to how maintenance services would be delivered, managed and governed, including the transition to a more complex contract environment and greater internal responsibility for contract and service management.
The new arrangements would govern more than $63 million per annum in outsourced maintenance expenditure across a portfolio of critical infrastructure services and represented one of the Council’s most significant contract management challenges.
The Future Maintenance Services model introduced substantial changes to how maintenance services would be delivered, managed and governed. Notably, the Building Maintenance Services model shifted from a head-contractor arrangement to the direct management of more than 15 specialist service providers, creating new responsibilities for service integration, asset management, works coordination and supplier performance management. This significantly increased the complexity of contract management and required new governance arrangements, capabilities and resourcing structures.
With all major contracts scheduled to commence on 1 July 2024, the Council faced considerable transition and implementation risk. The organisation needed confidence that its proposed operating model, governance framework, resourcing structure and contract management capability were sufficient to successfully transition to and manage the future state environment.
Task
To support this transition, the Council engaged Grosvenor to undertake an independent review of its proposed contract management operating model, governance arrangements, resourcing requirements and capability needs.
Grosvenor was tasked with assessing whether the proposed model was fit for purpose, benchmarking it against industry practice and recommending the most appropriate structure, skill sets and implementation approach to support successful contract delivery and value for money outcomes.
The objective was to determine whether the Council had the capacity, skills and commercial management framework necessary to successfully transition to and manage its future outsourced maintenance services portfolio while achieving value for money and service outcomes.
Grosvenor subsequently supported the Council across two distinct phases:
Phase 1: Assess whether the proposed contract model, governance arrangements and resourcing structure were fit for purpose ahead of contract commencement.
Phase 2: Provide hands-on implementation support to establish the target operating model and transition to the new contractual arrangements whilst maintaining business-as-usual service delivery.
Approach
Phase 1
Grosvenor undertook a structured contract management capability diagnostic to assess whether the Council’s proposed Future Maintenance Services (FMS) operating model, governance arrangements, resourcing structure and capability framework were fit for purpose. The review included a detailed assessment of current and future contractual arrangements, supporting procurement documentation, organisational structures, position descriptions and proposed contract management responsibilities. Workshops and consultations were conducted with the Council’s leadership and operational teams to understand current challenges, future requirements and readiness for transition.
Drawing on industry benchmarking, peer comparisons and Grosvenor’s commercial management expertise, the team assessed the Council’s proposed model against better practice principles and comparable organisations. The review identified capability gaps, implementation risks and opportunities to strengthen governance, commercial management, asset management and contract management functions. Grosvenor developed a future-state operating model, governance framework, resource structure and transition roadmap, supported by practical recommendations to enable successful implementation of the FMS contracts.
Future state options were then developed and assessed using industry benchmarking and Grosvenor’s proprietary data, supported by subject matter expertise. Findings and recommendations were consolidated into a future state recommendation pack, and a preferred model was tested and endorsed in a workshop with senior stakeholders ahead of contract transition.
Phase 2
Building on the Phase 1 review and recommendations, Grosvenor continued to support the Council through Phase 2 by providing hands‑on program, change and contract management support to implement the new operating model and transition to the Future Maintenance Services contracts as the Council progressed through a critical period of transformation and contract transition.
Grosvenor supported the establishment of a structured transition program, including PMO governance, reporting arrangements and an integrated transition schedule for the four primary contracts. Contractor transition‑in plans were reviewed and refined. This process ensured readiness for contract commencement on 1 July 2024. It is important to note that transforming contract management ensured the schedule was robust and effective.
Grosvenor led the rapid development of fit‑for‑purpose Contract Management Plans, updated contract management guidelines and deployed practical tools and templates to support consistent implementation. Capability uplift was supported through recruitment assistance, targeted training, interim commercial support and on‑the‑job coaching. The process of transforming contract management was reflected in each of these improvement strategies.
Following contract commencement, Grosvenor continued to support the client to embed effective contract management practices, driving improved supplier performance, collaboration and value for money outcomes. Continuing the efforts involved in transforming contract management, the post-commencement phase ensured sustained benefits.
Result
The Council successfully established the foundations required to support implementation of its Future Maintenance Services (FMS) operating model within a challenging transition environment within a constrained timeframe with minimal disruption to business‑as‑usual service delivery.
Through phase 1, the Council received a clear, fit‑for‑purpose contract management operating model, supported by appropriate governance, resourcing and practical tools. Contracts were implemented consistently, with clear roles, responsibilities and controls in place from commencement. The review provided a clear roadmap for transition, including recommendations relating to commercial management, governance, asset management, contract management capability and transition planning.
Through Phase 2, Grosvenor provided scalable implementation support to assist the Council in progressing priority transition activities, establishing governance and program management arrangements, developing contract management tools and documentation, and addressing capacity constraints during a critical period of organisational change. Internal capability was uplifted through targeted training, recruitment support, interim commercial assistance and hands‑on coaching, enabling teams to effectively manage a larger and more complex supplier base. Structured transition planning, change management and stakeholder engagement supported strong alignment across the organisation.
As a result, the Council was better positioned to implement the Future Maintenance Services model, supported by defined governance arrangements, enhanced contract management practices, improved commercial oversight and a structured approach to managing a maintenance services portfolio valued at more than $63 million per annum.
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