RISK 8: Relationships with contractors

Definition

Poor relationships between the contractor and the public sector can impact the service being delivered and thereby reduce value for money.

Overall assessment of this risk category in the eight case study projects	Low level of current risk to value for money
Heavy Equipment Transporter
Field Electrical Power Supplies
Medium Support Helicopter Aircrew Training Facility
Armoured Vehicle Training Service1	N/A
Main Building Refurbishment
Defence Animal Centre
Defence Fixed Telecommunications System
Tidworth Water and Sewerage

Reason for overall assessment of this risk category in the eight case study projects:

Low level of current risk to value for money

Good working relationships are recognised as an important factor in securing good overall performance. We found that, although there had been problems in some projects over the operation of payment mechanisms, working relationships were generally good between the Department and its PFI providers. Poor relations did however contribute to overall poor performance on the Defence Animal Centre project.

NOTE

1 This project did not proceed to contract and is not part of the current Department portfolio.

2.41 We found that the relationships between the Department and the contractors delivering services are generally good and were making a positive contribution to contract management. Only at the Defence Animal Centre, where there have been major changes in the staffing both on the Department and contractor side, were there poor relationships. These have arisen because of the Department's frustration with the ineffective payment mechanism and ambiguous contract terms and dissatisfaction with contractor performance. Disagreements over service monitoring had led to relationship problems on the Main Building Refurbishment project but these problems have now been resolved.