Third-Party and Subcontractor Management Policy
Aged care providers rely on a wide range of third-party suppliers and subcontractors, from cleaning and catering companies to allied health practitioners and IT vendors. This policy template helps facility managers and compliance officers build a clear, auditable framework for selecting, engaging, and monitoring those external partners. It is designed for residential aged care providers, home care organisations, and mixed-service operators across Australia.
What This Policy Covers
A third-party and subcontractor management policy sets out the rules for how an organisation brings external parties into its service delivery model. It covers due diligence before engagement, contract requirements, ongoing performance monitoring, and exit or termination processes.
The policy applies to any individual or organisation that delivers services on behalf of the provider, whether under a formal subcontract or a less formal service agreement. This includes maintenance contractors, agency staff suppliers, laundry and food service vendors, and visiting health professionals.
Why This Matters for Aged Care Compliance
The Aged Care Act 2024 makes it clear that approved providers cannot transfer their accountability to a third party. If a contractor fails to meet care standards, the provider remains responsible. This is not simply an administrative concern; it directly affects resident safety and organisational registration.
Strengthened Aged Care Quality Standard 2 (The Organisation) places explicit obligations on governing bodies to maintain oversight of all parties delivering services under the provider's approval. Boards and executive teams must be able to demonstrate that contractors are vetted, monitored, and held to the same performance expectations as direct employees.
A strong third-party management policy sits alongside your Risk Management Policy as a first line of defence against service failures and compliance gaps. Together, these documents show the regulator that your governance arrangements are active, not just documented.
What a Good Policy Should Include
The table below summarises the key elements regulators and auditors expect to see in a third-party and subcontractor management policy, along with the relevant standard or requirement each element addresses.
Policy ElementWhy It Is RequiredRelevant Standard or LegislationDue diligence and pre-engagement screeningConfirms suitability before a contractor accesses the serviceAged Care Act 2024, Quality Standard 2Contract and service agreement requirementsSets out obligations, confidentiality, and performance expectations in writingAged Care Act 2024 partner oversight provisionsOngoing monitoring and performance reviewDemonstrates active oversight rather than a set-and-forget approachQuality Standard 2 (The Organisation)Incident and non-compliance reportingConnects contractor conduct to the provider's incident management systemAged Care Act 2024 serious incident obligationsRoles and responsibilitiesClarifies internal ownership so oversight does not fall through the cracksQuality Standard 2, Governance obligationsExit and termination proceduresProtects residents and operations when a contractor relationship endsAged Care Act 2024, contract law obligations
Your policy should be reviewed at least annually or whenever there is a significant change in your contractor arrangements. This review responsibility should sit with the person accountable for governance and compliance, whether that is a Director of Nursing, General Manager, or a dedicated compliance officer.
How This Policy Connects to Your Broader Governance Framework
Subcontractor oversight does not exist in isolation. It connects directly to how your board and leadership team exercise responsibility for service quality. The Governance and Board Accountability Policy sets the tone from the top, and your third-party management processes need to be consistent with those commitments.
Providers who approach contractor management as a standalone task often find gaps when auditors look at how information flows between the contract manager, clinical leaders, and the governing body. A joined-up approach, where contractor performance is reported through governance channels, gives auditors the evidence they need.
How Governa Helps
Governa's AI compliance tools, including the Norma bot, help aged care teams track policy currency, flag review dates, and check whether documentation keeps pace with regulatory changes. Rather than relying on manual spreadsheets or calendar reminders, your team gets proactive alerts when a policy or contractor agreement is approaching its review date.
The full Policy Templates Library gives providers a starting point for every major compliance area, including this one. Templates are written to reflect current Australian requirements and are updated when standards change.
Download the Free Template
The free Third-Party and Subcontractor Management Policy template below is ready to customise for your facility. Fill in your organisation details, adjust the procedures to match your existing practices, and have it reviewed by your governance lead before approval.
Want to see how Governa can help your team manage compliance across all policy areas? Book a demo at governa.ai and see how Norma works in practice.
