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Enhanced Oversight of Service Contracts Can Help Ensure Cost-Effective Performance (January 2016)


State agencies are responsible for each of three phases of contract procurement: sourcing evaluation, contract formation, and contract management. PED found that state agencies are not ensuring procurement of contracted services achieves best value. PED examined 133 contracts for high-value services with total award value of $1.24 billion and found $511 million stemmed from non-competitive practices. State agencies are not adequately adhering to best practices with regards to documenting the basis for their decisions to contract with private providers; not including all necessary attributes of an effective service contract during the procurement process; and not ensuring compliance with terms and conditions. State-level monitoring by the Department of Administration’s Division of Purchase and Contract (P&C) has also failed to contribute to achievement of best value. The General Assembly should require state agencies to submit business cases for high-value services to P&C for review and approval in accordance with established criteria and direct P&C to implement a system to monitor state agency-administered contracted services.

Final Report

Executive Summary



Relevant Legislation:

  • House Bill 976/Senate Bill 789 (2015–16): An act to enhance oversight of state service contracts, as recommended by the Joint Legislative Program Evaluation Oversight Committee. This legislation was not enacted.

Other Committees:

Press Coverage:

Program Evaluation Division, North Carolina General Assembly
Legislative Office Building, Suite 100
300 North Salisbury Street , Raleigh, NC 27603-5925