Risk assessment in public contracts

This article aims to introduce a novel approach to risk assessment in public service commissioning contracts, through the lens of the UK’s defence sector. It begins by providing a concise background to the contemporary service commissioning tools and approaches that are currently adopted by public sector organisations, paying particular attention to the contemporary implementation of framework agreements. Risk assessment in public sector contracting is embedded by the choice of prescribed terms and conditions, which by design, are formalised within a contract to mitigate a menu of recurrent or common risks. Whilst the interpretation, incorporation and reasonableness of the contractual terms and conditions are readily acknowledged amongst legal practitioners as a fundamental pillar for risk assessment, the dynamic patterns associated with risk remains undervalued. To fully account for the dynamic nature of risk, a tool for mapping the migration of risk has been developed in order to provide a new method of ex ante risk assessment to the design and inception of public sector contracts