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Short Guide: Contract formation

Authors: Government Outcomes Lab

Publication Date: 2018

Location: United Kingdom

Stage: Manage the contract

Policy Area: Social impact bonds


This short guide is prepared for commissioners and legal teams in public contracting authorities, who are developing social impact bonds (SIBs). At the Government Outcomes (GO) Lab at the University of Oxford, we have observed one major barrier and five potential hurdles that can prevent a SIB contract from being executed if not resolved. This guide will illustrate these points and can help overcome challenges of contracting SIBs.

The major barrier is that the legal team is engaged too late in the process.

The five potential hurdles are set out below. 

  1. Inappropriate standard payment terms
  2. Disagreement on minimum and maximum referral rates; 
  3. No contractor protection in case of authority termination; 
  4. Inappropriate monitoring terms; and 
  5. Lack of flexibility for changes. 

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