No automatic contract extensions
Contractual exit plans must be developed as an alternative to extension or evidence provided for why an extension is both legally allowed and value for money
To meet this commitment as part of Digital and Data function’s strategic commitments your plans must show how you will consider your future options in enough time to avoid having no choice but to extend.
In the majority of cases this will mean that the need and requirements for contracts are reevaluated before the end of their term, so that the competition can be reopened if necessary.
This means that you must prepare exit plans for contracts with enough time for exit and transition. Your exit strategy is a document which specifies how your organisation plans to exit a current service provider’s contractual provision at the end of their contractual term.
If you do not have an exit strategy, you must provide evidence for why an extension is legally allowed and value for money. Where contract extensions do take place, these must be fully compliant with public procurement regulations. Your project team may be asked to provide legal advice to demonstrate this.
In some cases an organisation may be able to demonstrate that extending a contract maximises benefits. If you do plan to extend the contract, you should conduct an analysis of options to demonstrate the value of the extension and should include in the analysis the opportunity cost of not developing in-house capabilities.
An argument for extension based on having insufficient time to consider alternatives is not sufficient grounds for approval.
If you’re going through the spend control process you must explain how you’re meeting this commitment if your spend request has been rated high on the risk and importance framework or has an assurance rating of control.
Answering ‘no’ will not lead to an automatic rejection and you will need to explain why your spend cannot align to the commitment.