Once the contract is agreed the public sector should focus on developing policies and procedures that reinforce the transfer of risk to the private operator. Interviewees observed that public sector employees can assume it is easier to simply complete a task themselves rather than push the private sector operator, who has responsibility for service delivery. This is a classic risk take back, where well intentioned action can dilute or blur the responsibilities of the respective parties.
Employees need an 'intentional mindset' to adjust their behaviour. This requires clear communication and instruction within the agencies to educate staff on the division of roles and responsibilities. Furthermore, the specialist skill set for contract management must be recognised and supported in government training and remuneration scales.
To drive performance, government agencies need clear reporting and communication protocols. Interviewees identified reporting specifications and understanding of the type of information required, as areas of concern in some of the early projects. This risk reinforces the importance of establishing structured communication channels in the initial stages of a project, not only to capture information but to develop a positive framework for the relationship. Government is under greater pressure to provide proactive contract management to improve information sharing and timeliness with responses.
"For performance incentives to be effective, the public sector needs to closely monitor operations and services delivery. Projects do not run on auto-pilot. The public sector needs to invest resources in appropriate contract management if projects are to be successful." Azhar Abidi, Investment Manager, Infrastructure Funds Management.
Over the last five years, projects have improved the clarity of information requirements and increased sophistication in measuring performance.
"Knowing what you want is one thing, agreeing on how to define, measure and report it is an entirely different matter. It requires the parties to be specific and develop a strong reporting framework. In recent PPPs the Government has improved the science of specifying and measuring performance outcomes, including a greater emphasis on associated business rules, benchmark standards and improvement processes." John lliadis, Contract Administrator, Casey Hospital.