In researching this guidance, WIDP has found that, although, every project has its own particular challenges there is a fairly high degree of consistency in relation to the key aspects of contract management systems that need to be prioritised to meet those challenges. These are:
• good management saves money;
• knowledge of the Contract;
• comprehensive communications (in and out, up and down);
• maintenance of access to expertise and support;
• enforcement of Contract conditions (or a proper and formal negotiation to waive them);
• retention of relevant governance structures with clear delegations, budgetary control and variance analysis and a formal log of outstanding issues and a process to resolve them; and
• knowledge of developments within the Authority, the Contractor and the sector/industry.
The main thrust of the guidance is that during the transition from the procurement period to the operational period the Authority should, through its Contract Management Team, apply strong project management skills to drive the changes necessary in this period. Once operational the emphasis shifts to consistent application of the contract management systems developed during the Transition Period.
Investing in effective contract management often provides a very high return for the effective value for the money spent.
In the Treasury's guidance4 on "Making savings in operational PFI Contracts" the first recommendation is that "Authorities should ensure that they have a good understanding of the existing contractual terms and are effectively managing the Contract".
_________________________________________________________________________________________
4 This Treasury guidance is available on-line at: http://www.hm-treasury.gov.uk/d/iuk_making_savings.pdf