4.1.1 Allocate management responsibilities

After the PPP contract has been signed, responsibility for contract management will normally be transferred to a contract management team established by the Authority. If a roads agency, for example, has more than one PPP contract, it makes sense on grounds of efficiency for a single contract management team to manage all ongoing PPP contracts.

A contract management team, reporting to a contract director, will carry out many day-to-day contract management activities. It is desirable to include the proposed contract director in the Authority's project management team at an early stage of the procurement process, or at least to allow him/her to follow the procurement process and have access to procurement team members. A good understanding of the project and its inherent risks will enable him/her to devise an adequate contract management strategy.

Before this transfer of responsibilities occurs, the Authority will need to ensure:  Guidance 87

•  that responsibilities are clearly defined, by appointing a team responsible for contract management separate from the project management team;

•  that the provisions for handling contract changes and managing failure of the PPP Company are in place;

•  that a system of on-going contract management review is in place; and

•  that there are sufficient budgetary and staff resources to undertake the contract management responsibilities.

It is important for the Authority to set out, prior to choosing the preferred bidder, the basic framework under which the contract management team will operate. This will reduce the bidders' cost and obligation uncertainties. Indeed, bidders will need to incorporate monitoring and contract compliance costs into their bids. They should therefore be provided with a clear indication of the type and frequency of information required from them.

At the start of the PPP contract, the contract management team will need to develop management tools and processes, including contingency plans. These will be set out in a contract administration manual.  Guidance 88