Operational Taskforce Note 2: Project Transition Guidance Research commissioned by the Treasury concludes that public authorities are experiencing good overall performance and high levels of satisfaction in PFI projects. 96 per cent of projects surveyed report that overall performance is at least satisfactory, and 89 per cent state that services are being delivered in line with the contract or better. Some contract managers however identified concerns with the transition to the operational stage. This note is therefore designed to provide practical advice for PFI projects moving from procurement to service delivery. It is aimed at public sector project mangers (responsible for the project in procurement) and contract mangers (responsible for the project in operation). Adequate Resource and Planning (chapter 2) Authorities need to start planning and budgeting for the operational stage at Outline Business Case (OBC). This should be updated as the procurement progresses to Final Business Case (FBC). The primary consideration of Authorities should be: • the need to ensure that during the procurement, the project is not just concerned with reaching financial close, but that there is also sufficient focus on planning for the project's operation. Signing the contract and the completion of the facilities are milestones and measures of success, but it is the provision of service over the life of the contract that is central to the satisfaction of users; • that contract managers should be appointed during the procurement, not after contract signature. Lack of involvement in the procurement may mean that operational issues are not identified in time for service commencement; • ensuring the involvement of the contract manager in formulating the payment and performance mechanisms, and undertaking a trial run before the project becomes operational; • viewing contract management as an activity that is integrated into the procurement of the project. Information on the cost to the Authority of monitoring the contract should be included in its affordability model. The Project Review Group, as part of its review process, will expect Local Authority projects to have fully considered this guidance when developing an Outline Business Case. Setting up Contract Monitoring and Management (chapter 3) The Authority should collate the key documents relating to the project in a portfolio of contract management documentation. This should include a partnership agreement setting out a shared vision for success. It should also consider including: • a note on the governance structure; • a contract administration manual; • a contingency plan; and The success of the operation of the project will, in part, depend on the accuracy, clarity and transparency of information exchanges between the public and private contractor. The likely changes of personnel over the duration of a PFI contract mean that such auditable information exchanges are particularly important. Communication and Relationships (chapter 4) There is a clear correlation between regular communication involving the Authority and the Contractor, and satisfaction with the project. Regular meetings, transparent and shared information, joint planning days, partnering workshops, and training days all assist this process Further Advice and Assistance For further advice and support in project transition, or any other operational PFI issues, the Treasury has established an Operational Taskforce currently run by Partnerships UK, available to provide free assistance on 020 7273 8356 or email: operationaltaskforce@partnershipsuk.org.uk. Departmental Private Finance Units should also be able to assist projects. |