Implementation – Managing PPPs
18.1 Why is contract management important?
A significant and often, in the past, neglected stage of a PPP
arrangement is the contract management phase. It is an essential,
although time-consuming and potentially costly element, of
any successful PPP.
Experience acknowledges that while significant consideration
is given to the tender, procurement, evaluation and contract
negotiation areas of PPPs, rather less attention is paid
to contract management. At the same time, contract management
skills have tended not to be widespread in the public sector.
While performance can be driven through appropriately structured
performance incentives or disincentives, sound contract management
arrangements are required to ensure performance standards
meet – and
preferably exceed – expectations throughout the contract
life. Without such arrangements in place, what may have been
a beneficial project for a government could quickly become an
even more costly exercise than if traditional procurement methods
had been adopted in the first place.
Effective contract management will, in most circumstances,
secure the interests of the public sector and the community
by the development of sound working relationships with
the service provider. This will allow services to be tailored
continually to the current needs of the users in ways that
are mutually beneficial to both parties.