Outcome
agreements
A quick guide
May 2015
Background
A new contract, called an outcome agreement, is being introduced as part of the transition to the
streamlined contracting framework (SCF). This will replace the Ministry of Health’s previous
contract template for all contracts that transition to the SCF.
What’s different?
The move to outcome agreements is part of a government-wide initiative to make the contracting
process more efficient and fairer for non-governmental organisations (NGOs). There will be one
form of contract and one standard set of core terms and conditions for all NGOs working in the social
sector.
There are several important differences between the old and new contract documents. These include:
 standard outcome agreement format, structure and layout that cannot be altered
 Results Based Accountability (RBA) outcomes, indicators and measures (RBA measures are
used to assess provider performance)
 the use of terms: ‘the Purchasing Agency’ replaces ‘we’, ‘us’ and ‘our’, while ‘the Provider’
replaces ‘you’ and ‘your’
 the introduction of business viability standards (BVS) to prevent duplicate accreditation of
NGOs by different purchasing agencies.
Structure
The elements of the outcome agreement are explained in the table below.
Element
Explanation
Outcome agreement
The outcome agreement is the contract. It comprises an
outcome agreement template that includes appendices and
annexes detailing the service to be delivered.
Framework terms and
conditions
These are the government-wide standard contract terms and
conditions that apply to NGOs under the SCF. They are
published on the Ministry of Business, Innovation &
Employment’s website and referenced in the outcome
agreement.
RBA population
Population outcomes describe the conditions of wellbeing for a
whole population. They set the context and direction for the
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2015 Ver 1.0
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Element
Explanation
outcomes
services being delivered.
Achieving these outcomes is the responsibility of the multiple
agencies and stakeholders whose services contribute to them,
including the contribution of an individual provider.
RBA performance
measures
Performance measures are used to help assess a provider’s
performance. Three questions measure the quantity and
quality of effort and effect:
 how many? (quantity of effort)
 how well? (quality of effort)
 is anyone better off? (quantity and quality of effect).
Provider reporting
New provider reporting templates set out all the information a
provider is required to report.
Audit procedures
Audit procedures are clearer. Annex B sets out audit
procedures and what NGOs can expect.
Business viability
standards
Business viability standards (BVS) are part of a crossgovernment initiative to share accreditation information across
agencies. This will reduce the compliance activities requested
from NGOs.
The standards accredit a provider against key areas of
organisational performance. The standards are being used by
the Ministries of Education, Health, Justice, Social
Development, the Department of Corrections and Te Puni
Kōkiri.
For more information see Quick guide: Business viability
standards.
Appendices and annexes
The SCF outcome agreement has 11 standard appendices, which contain all the contract details.
There are some small differences across the Ministry in where information is placed, because of the
nature of the services being purchased. The table below lists the contents of each appendix for
Disability Support Services (DSS), Sector Capability and Implementation (SCI) and Public Health
Group (PHG).
Appendix
DSS and SCI contracts
Differences in PHG contracts
Services, outcomes to be achieved and
performance measures. Incorporates
Tiers 1, 2 and 3 service specifications by
reference.
Contains the population outcomes and
experience statements, and indicators
related to the services. A description of the
services and performance measures is
contained in Annex A.
2
Monitoring by the ministry
No difference
3
Regular reporting by the provider
No difference
4
Regular audits of the provider
Not applicable for PHG contracts
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Appendix
DSS and SCI contracts
Differences in PHG contracts
5
Payment for services
No difference
6
Conditions the provider is responsible
for
No difference
7
Conditions the ministry is responsible
for
No difference
8
Incentives (not currently offered)
No difference
9
Permitted information disclosure
No difference
10
Ownership of new intellectual property
(IP)
No difference
11
Further terms and conditions
No difference
The outcome agreement has four annexes as shown below.
Annex
DSS and SCI contracts
Differences in PHG contracts
Reporting template
Service schedule that sets out the reporting
format
B
Audit and review clauses
Additional audit clauses
C
Business viability standards
No difference
Critical incident reporting
Public health services provider quality
specifications
A
D
Changes to contract obligations
The new contracts contain some differences in the responsibilities of each party, as listed below.
Obligation
Explanation
Intellectual property
What’s the same?
All pre-existing IP remains the property of the party who owned it
before the outcome agreement was signed.
What’s different?
New IP created by the provider under the contract will be owned
by the provider. The provider, however, grants a free licence to
the Ministry of Health to use it.
In PHG, this provision is subject to an agreed uses clause, which
states that the Ministry may transfer any new health education
resource IP to any other person or entity.
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Termination for
convenience
What’s the same?
Both parties can terminate a contract for convenience (without
the other party having breached the contract).
Points to note
This right applies to all contracts. The party seeking to terminate
must give 90 days’ notice. This right to terminate is in addition to
a right to terminate in the event that a party is in breach of the
contract. Termination for breach is on 14 days’ notice.
Remedy plan
The outcome agreement introduces the option of agreeing a
remedy plan where either party has not satisfied the conditions of
the contract or has breached any other obligation. This plan is
recorded in writing. It identifies the breach, the reason it occurred
and what each party will do to remedy it.
Remedy options
DSS only.
Clauses 7–13 of appendix 11 set out context for how each party
will treat the other. It also details the remedy options the Ministry
can choose from if a provider breaches the outcome agreement.
Indemnity
The indemnity provision in the outcome agreement replaces the
previous clause. The new provision is fairer to a provider because
the indemnity only applies to a situation where a provider
breaches the contract causing a 3rd party loss, which the 3rd party
then attempts to claim from the Ministry.
Giving notice
Either party may give notice by email. This replaces the previous
ability to give notice by fax.
Child protection
policy
In line with the Vulnerable Children Act 2014, providers that
deliver services to children (within the definition of the Act) are
required to have a child protection policy.
Permitted
information
disclosure
The Ministry may disclose certain information specified in appendix
9 without the provider giving further consent.
This information includes:




Ministry failure to
pay on time
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existence of the outcome agreement, the nature and quantity
of the services provided, the payments made and the term of
the agreement
final audit reports
information about compliance with the business viability
standards
name of the provider’s chief executive, or officer with
authority to act.
DSS and SCI only.
A default interest clause (if previously included in a contract), has
been replaced by a clause specifying that the parties will agree a
remedy plan to address financial loss suffered by the provider if the
Ministry fails to pay on time.
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