Contract management is a key activity for agencies involved in managing a Partnerships Victoria project after the contract is executed. Implementation of effective contract management practices will assist government to achieve the broader objectives of Partnerships Victoria.
The Partnerships Victoria Contract Management Guide (2003) in Annexure 12 provides project managers with principles and tools to support effective contract management in PPP projects. (Part one of this guide is replicated as an appendix in the National PPP Guidelines Volume 2: Practitioner's Guide).
There is a requirement for a Contract Management Plan to be approved by the Portfolio Minister is consultation with the Treasurer within three months of financial close. Following this Plan, a more detailed Contract Administration Manual is required to be developed (or cross referenced with existing internal processes). The Contract Administration Manual (but not the Plan) will evolve over time as the project moves through different phases. Contract Management Plans and Contract Administration Manuals should cover both the design and construct and the operating phases of projects.
Contract management must form an integral part of the Partnerships Victoria project delivery process. Contract management issues should be considered early in the development of the project's contract documentation. Contract management personnel should be involved in the procurement phase where appropriate and there should be an effective transition/handover from Project Director to Contract Director. The initial Contract Director (who may have been the Project Director during the procurement process) should be identified and appointed prior to contract execution. The processes contained in the Contract Administration Manual must be implemented on a proactive basis while being capable of modification throughout the life of the project.
The Procuring Agency should establish and maintain appropriate governance structures and lines of communication between the public and private sector entities to facilitate a sustainable long-term partnership.
Agency Accountability. The Procuring Agency will be responsible for establishing a robust contract management framework, maintaining effective contract management practices throughout the contract term, and successfully delivering project objectives. This is to include:
- appropriate governance structures and effective communication and reporting lines;
- ensuring that all PPP project Contract Directors and relevant members of their teams undertake appropriate training within six months of their appointment, unless they have existing contract management experience or credentials;
- systems to ensure the continuity and retention of project knowledge over the life of the project;
- risk and dispute mitigation and their reporting; and
- regular ongoing review of its contract management practices to identify outstanding and emerging issues and take into account recent and anticipated future developments.
Treasury Accountability. DTF will have responsibility for:
- supporting and reviewing the contract management of Partnerships Victoria projects, including assisting in risk mitigation and dispute resolution;
- facilitating the sharing of contract management knowledge, including through conducting forums for contract managers to share lessons learned and network with their peers;
- establishing and implementing an appropriately credentialed and professional standard training program for public sector contract directors/managers; and
- monitoring and independently advising the Treasurer and Cabinet on significant contract management issues.
Website: www.partnerships.vic.gov.au
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Published: February 2009
Version 2 published January 2010