A sound understanding of the commercial environment, particularly the financial markets, will help governments react to change faster and more effectively. This is true whether it is a change that occurs during the course of the transaction or in the context of downstream contract revisions. As evidenced in the current economic environment, some public procurers did not know how to react to the turmoil around them, and, after a period of denial, many problems remained; others came up with practical and relevant responses.
Several of these transaction capacity factors are captured by a review undertaken by the UK financial comptroller who looked at the reasons that it is important to deliver projects to their contracted prices, as shown in Figure 1.2 Many of the reasons highlighted are about clarity of what is wanted, responsibilities, management skills, and relationships among parties.