One of the key roles of the contract management team is to monitor the level of fulfilment of the service against the output specification documented in the project agreements.
This may involve:
∙ monitoring the achievement of contracted milestones for development, site acquisition, construction and commissioning
∙ monitoring the level of service delivery against the performance indicators documented in the project agreements
∙ making payments to the private sector party if the service provision meets the performance indicators or, conversely, invoking penalties if the service provision does not meet the performance specifications
∙ ensuring the private sector party fulfils all other requirements in the project agreements, e.g. obtaining and maintaining adequate insurances
∙ ensuring that government does not inadvertently assume risks allocated to the private party (for example, through approval of design changes)
∙ ensuring that no changes in practice or procedure occur which amount to de facto waivers or contract variations without prior consideration and approval
∙ ensuring that any critical issues and claims by any parties are investigated and dealt with in a timely manner
∙ setting up a reporting and monitoring system-this should be provided for in the project agreements
∙ developing a communications plan for public relations and for communicating key changes to internal stakeholders
∙ further develop the contingency plan in case of service failure during the project implementation phase (if relevant)-this includes identifying any possible need to step in or take other action to ensure the project is delivered in accordance with the terms and conditions of the project agreements.
In monitoring the service delivery, it is important that the contract management team enforces the obligations and timeframes outlined in the project agreements. Failure to do so may erode the government's rights under these agreements, particularly in instances of default.
The project agreements must detail the level of reporting that is required.
The key principles for the contract management team should be the careful monitoring of performance and quality, and maintaining the incentives and penalties specified in the project agreements.