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Partnership working in the STEPS deal

Open communication, share information and work together to solve the problem

■  Earlier consideration of the offshore nature of the company may have enabled the Departments to develop a communications strategy to deal with any resulting negative publicity.

■  Rothschild's report noted that, at the start of their financial problems, the contractor presented its figures in such a way that it took time for the Departments to clarify Mapeley STEPS' financial position, thereby delaying their response to the problem.

■  There was some confusion over whether Mapeley STEPS would break any of its financial covenants during its period of financial difficulties. It stated that there was a risk that it would breach its obligation to repay its working capital on 31 March 2002, but subsequently injections of shareholder capital ensured that it would not be breaking this obligation.

Co-location helps to improve communication

■  Co-location can help to improve communication and lead to a good relationship. Mapeley STEPS is not co-located with the Departments at the moment and there may be benefits in moving towards this.

■  There is some form of local co-location, as the contractor's mobile Area Business Managers move between the Departments' offices.

Roles and responsibilities must be clearly defined

■  The Departments are taking the opportunity to redevelop and improve the governance structure.

Continuity of staff to build relationships

■  There is a large turnover of Mapeley STEPS and Departmental staff. Succession planning was undertaken for go-live and this will continue to be essential, given the ongoing negotiations.

Open and honest environment

■  The relationship has been affected by the financial negotiations. The Departments and Mapeley STEPS have maintained the relationship on the service delivery side by keeping this separate from the financial negotiations.

Appropriate monitoring of contractor's performance

■  The PMS is not fully implemented (in the case of KPI 5) and is subject to disagreement. The Departments and Mapeley STEPS are working to develop an alternative.

PMS incentivises

■  Mapeley STEPS claims that the PMS penalises rather than incentivises it. The Departments do not agree, but wish to work with the contractor to improve incentivisation.

Change procedures are important and good change procedures help the relationship

■  There are frameworks for change in the contract, but the detailed procedures that make up the change processes have not been yet been fully used - for example, it is taking longer than expected to incorporate new facilities into the contract.

Source: National Audit Office