• Service: Topics, Government, Public service reform
  • Industry: Government, Federal Government, State & Territory Governments
  • Type: Business and industry issue, Regulatory update
  • Date: 13/05/2014

Contestability frameworks: An approach for governments 

Around the globe, governments are using contestability frameworks to reshape public service delivery as they seek to prepare for the anticipated challenges presented by changing demographics, future low economic growth and fiscal constraints.

There are major changes being made to traditional public service delivery as governments rethink what they need to provide and how to meet growing demands for better, more personalised services with shrinking funds.


Many governments see that simply continuing to provide services in the same way will not achieve the step change required to protect public service provision into the future. A very different approach from government is required to develop a sustainable contestable market with a variety of delivery models and providers.


Improving productivity requires altering government buying arrangements to build a public sector economy that makes a difference to service outcomes, creates market behaviours that result in increased competition, and price and productivity that will flex to align with demand.


The most successful models are not just driving down cost but are connected to thorough policy processes that re-imagine the service outcome.


Approach to contestability

This approach sets out key contestability activities, which will flex depending on the services being considered, the evaluation criteria and strategic intent of the organisation and options being taken forward for consideration. These activities are typically supported by a robust project management, stakeholder engagement and governance framework.


Strategic Assessment

  • Define the future vision and strategy
  • Determine design principles
  • Develop service catalogue
  • Define evaluation criteria
  • Develop current state understanding
  • Prioritise services for consideration
  • Compile options long list.

Options Analysis

  • Refine service catalogue
  • Develop detailed service baseline
  • Undertake initial market scan and market soundings
  • Refine options to agree preferred option
  • Test preferred option
  • Draft contestability strategies.

Solution Design

  • Develop high level solution design
  • Develop full business case
  • Draft high level implementation pathway(s)
  • Conduct structured stakeholder consultation
  • Determine the need for procurement strategies.


  • Activities and outcomes will be dependent on the solution recommendations in the business case



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Paul Kirby on the UK's public sector reform program

Paul Kirby
Paul Kirby, KPMG’s Global Head of Government shares insights from the UK’s public sector reform program.

Contestability: Rethinking public service delivery

This factsheet provides an overview of the concept of contestability and how governments are using it to 'shake-up' public service delivery.


KPMG works with all levels of government (federal, state, local, agencies) to help them respond to policy and service delivery challenges.