The importance of a contracts database

A contracts database is an essential tool in your procurement kit. So how do you create one? Education-sector owned charity CPL Group explains how

A contracts database or contracts register is a centralised, searchable, tagged repository for all the contracts your institution is responsible for, as well as information relevant to their status, approval process, legal onus, and fulfilment requirements. A contracts database is an essential tool in your procurement kit. It will enable you to organise your contracts, keep track of costs and keep an eye on contract end dates. A well-managed database will help you to plan procurement activity in advance which will assist you in avoiding out of contract rates and reduce the risk of getting a financial penalty for non-compliance with the procurement regulations.

What are the risks of not having a contracts database?

If you don’t have a database for your institution’s contracts there is a risk that one or more of your contracts may go out of date and you may not realise. Your out of contract rates may be much higher than your original contract rates, an example of this would be a gas and electricity supply contract, due to the variable energy market your institution could move on to a much higher tariff. An out of contract rate could provide a risk of going over budget and funds may then be required from another budget which could impact on other areas within your institution.
Without a well-managed contracts database there is also the risk that you may not have enough time to complete a full tender process. Certain complex requirements, such as those for an outsourced catering or cleaning service, may take up to six months to procure and the database will act as a reminder to start those processes early. If you haven’t allowed the time for a full process, you may be able to use a framework agreement for your procurement instead to save time as you won’t need to advertise the requirement on the Find a Tender service.
If you’ve not used a contracts database and haven’t allowed enough time for a procurement process to get a service in place ready for your contract end date you may not have the services in place when your institution needs them. It could also put pressure on your relationship with your current supplier.
Being out of contract also provides a risk of non-compliance with the Public Procurement Regulations 2015. Non-compliance could also have a negative effect on your institution’s reputation.

How do I create a contracts database?

You can create a contracts database by adding details of all the contracts your institution has into a spreadsheet which is stored electronically and centrally. Alternatively, if you have an e-tendering provider you could ask if they have an online contracts register and management module that you can use.
The database will act as your central repository providing details of all the contracts that your institution has in place. It will need to include details for each contract such as the start and end date, supplier name, supplier contact details, procurement methodology used in creation of contract (i.e. tender or call-off from framework), spend and the type of process. Additionally, you could add a column which highlights the date you need to review the contract to allow yourself enough time to a complete a tender process.
To get started you could download an example Contracts Register from then look on Contracts Finder for any of your previous tenders then download your notices and add the details into your database. Also, if you have used framework agreements you may also be able to find details of your awarded quotes on your framework consortium’s website.
Once you have all of your contracts recorded in the database, set up a process to ensure that all effective dates of contracts, contract values and contract issues are logged and monitored regularly with robust KPIs. Make sure only Executive or SMT can provide sign-off. Also save a copy of each original contract on file electronically with the database in the event that a contract is queried.

What are the benefits of a contracts database?

A contracts database will benefit your institution as it will help you to identify when a contract is coming up for tender in advance and assist when planning resources for procurement. It will help you to ensure there is sufficient time for the procurement process which will help to increase competition to drive down costs, helping you to receive the best value for money for your institution.
Using the database will help you to ensure that contracts are in place for key spend areas, that legislative obligations are met and that commercial opportunities are maximised. It will help you to manage and mitigate risks at your institution including the risk of being tied into high tariff rolling contracts or being non-compliant with procurement regulations.         

A well-managed database will also assist with providing a visual of your contracts and costs when your institution is audited or if your institution applies for grant funding and you need to provide evidence of spend.

CPL Group

The CPL Group is an education owned charity that gives back to the sector. We provide services that promote good practice and enhance procurement activities, helping to advance education and research in procurement. Crescent Purchasing Consortium (CPC) and Tenet Education Services are not-for-profit organisations which are part of the CPL Group. CPC is a purchasing consortium with over 90 procurement framework agreements designed specifically for the education sector with a large number being recommended by the Department for Education. Tenet Education Services provides procurement consultancy support to education institutions managing tender processes and procurement placements.