A If the deal is to be successful in the long term, the Departments and Mapeley STEPS should conclude the current negotiations, and incorporate agreed variations to the contract as soon as possible, and move towards a partnership approach to managing the deal.
There is some evidence that both parties are working together to achieve this objective. Examples of partnership working that are beginning to emerge include: the development of a longerterm estate strategy; the redevelopment and improvement of the governance structure; and attempts to improve the monitoring of Mapeley STEPS' performance.
B Mapeley STEPS' pricing and business model mean that its finances are likely to be finely balanced for the foreseeable future. Good risk management will be essential if the Departments are to secure the full value of the deal.
The Departments have built on their existing risk management arrangements, but they need to ensure that comprehensive risk management processes are in place and review these regularly as deal risks change.
C The Departments and Mapeley STEPS need to develop a single business focus that will involve the Departments developing an understanding of how their own decisions impact on the contractor, and the latter continuing to provide access to its income and forecasts.
The Departments and Mapeley STEPS are addressing this issue, in part through the development of commercial and estates strategies, to understand the possible impact on the contractor of the Departments' vacations of parts of the estate. Both parties will also have to be willing to change the contract where necessary.
D The performance measurement system should balance both rewards and reductions in payments, in order to incentivise Mapeley STEPS to carry out the day-to-day activities that are necessary to prevent future problems from occurring.
The performance measurement system can only function effectively when all parties are agreed on the criteria for, and the value of, deductions under the performance regime. In STEPS, the system is currently being reviewed and will not be fully effective until the outstanding issues are resolved.