Effective contract management by the state during the operating phase of a PPP is critical to realising and maximising the value from the arrangement.
Specific guidance on contract management is provided in Chapter 4 of the Partnerships Victoria Contract Management Guide. The guidance requires a contract management strategy and a contract management team to be established at the beginning of the procurement stage, with transfer of their responsibility to the contract director/administrator at the completion of the procurement process.
The CMP for the RCH project was developed within the required timeframe but the CAM has not been completed. This needs to be addressed by DHS.
The project agreement specifies that a contract administrator for the RCH project must be appointed at least three months prior to the stage one completion date (22 December 2011). Prior to this date the state is represented by the project director.
The role of the contract administrator is to exercise the powers, duties and discretions detailed in the project agreement on behalf of the state, and monitor the project company's compliance with the obligations detailed in the project agreement.