• Authorities need to plan in good time for operational activities. Authorities should budget for operational contract management at Outline Business Case (OBC) stage. These plans and budgets should be revisited as part of the Final Business Case (FBC). Authorities' budgets should include costs for personnel dedicated to contract monitoring and also for personnel who may be needed at specific stages in the operational phase of the project, e.g. for market testing exercises or utilities charging adjustments. Likewise, the procurement phase itself should have operational phase personnel involved, particularly during the development of the services specification, payment mechanism and in the post Preferred Bidder stage. In the health and education sectors, the pre-Financial Close Key Stage Review will review these aspects.
• Authorities should recognise that the construction monitoring phase requires different resources to the operational phase. During the construction phase, the Procuring Body will require to monitor progress and approve certain aspects of the project for example, reviewable design data, Contractor and Authority changes and provide regular reports on progress to the Project Board. During the operational phase, the focus will be upon contract management and monitoring.
• Authorities should consider whether they will need to re-engage any of their advisers employed during the procurement phase, and accordingly include provision for this from the outset in their initial procurement of advisers and their terms of engagement.
• Authorities should consider appointing their operational phase contract manager during the procurement phase. Research undertaken has showed that the majority of contract managers had not been recruited until after contract signature. Many of these began their role up to six months before the start of the operational phase. Lack of involvement of contract managers in the procurement and construction phases may mean that a range of operational issues are not identified during the procurement. Tensions may arise because these have to be dealt with early in the operational phase. Difficulties with contract payment and performance mechanisms can be exacerbated through lack of involvement of contract managers when these documents are being formulated and negotiated.
• Authorities should plan for changes in key personnel: e.g. project manager and contract manager, and make sure that there is a formal handover process between personnel such that there is a full transfer of knowledge regarding the project and its documentation, and rationale in respect of key terms.