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Managing relationships and conflict

Building good relationships, and managing disputes and interpersonal conflicts.

The three key factors for successful supplier or provider relationships are:

  • openness and excellent communications
  • developing mutual trust and understanding
  • a joint approach to managing delivery and solving problems.

Aim to create an environment where each party:

  • has the opportunity to both talk and listen
  • respects the other’s perspectives.

Managing the relationship

Relationships develop over time, but you also need to actively build trust, commitment and communication by:

  • providing positive and constructive feedback
  • listening, identifying and addressing problems promptly, and explaining decisions and actions in an impartial way
  • collaborating and respecting the supplier's or provider's expertise
  • adopting a structured approach to managing the relationship.

In the contract management plan (or Outcome Agreement Management Plan):

  • plan the frequency of engagements - meetings, phone calls, visits - and think about their tone
  • plan information to be shared and discussed
  • consider a meeting plan for significant meetings - include the meeting name, purpose, frequency, organiser, attendees, agenda, and outputs.

Disputes and interpersonal conflicts

Stop disputes before they start

Sometimes relationships deteriorate, or there are disagreements about what the parties expect of each other. These disagreements are almost always caused by poor communication or misunderstanding rather than deliberate intent.

You can prevent most disputes by getting together regularly to discuss any problems and agree on solutions. If you have any concerns about your supplier's performance, raise it with them as soon as possible.

Resolving disputes

If a dispute does arise, try to resolve it directly with your supplier. If you can't solve it together, you may need to escalate it.

A potential escalation process is outlined below. You can vary the number of business days for escalation.

  1. If the dispute isn't resolved within 10 business days, the agency and the supplier should escalate it to their senior representative.
  2. If it's not resolved within another 10 business days, the agency and the supplier should escalate the dispute to their Directors
  3. After a further 10 business days, the agency must escalate the dispute to agency's Deputy Secretary or Chief Executive. The supplier should escalate it to their General Manager or Chief Executive.

If escalation doesn't help, the contract should include a process for dispute resolution, such as mediation. It's really important to speak to your legal team if things get to this point. Mediation could result in a remedy plan.

Create a remedy plan

A remedy plan details the resolution to contract problems or a formal dispute. It records:

  • the non-performance issue
  • the reason for the non-performance
  • action the purchaser or supplier/provider must take to address or resolve the non-performance issue, including a timetable for those actions to be taken.

If the problem can't be remedied, suspension or termination of the contract may be necessary.

Terminating a contract

Go to litigation as a last resort

Going to court should only ever be a last resort. It is costly, slow and happens in public.