MOD is managing its relationship with Modus

3.5  In our report 'Managing the relationship to secure a successful partnership in PFI projects' we said that 'even with the right contractual framework a successful partnership between authority and PFI contractor will only be achieved if the framework is made to work in practice'. This will require, amongst other things, good governance arrangements, colocation of staff and reassessments of the relationship. MOD has addressed these issues and recognises that its ability to have high-quality serviced accommodation available for its Head Office staff until 2030 depends on it building an effective partnership relationship with Modus. In particular in this deal:

a  Modus, the Main Building Redevelopment team (MBR), the contractors, Skanska and Amey, have attended workshops aimed at understanding each other's businesses to establish a partnership approach based on a common vision of how they will work together to achieve a mutually successful outcome to the project. This requires a continuing commitment and willingness to overcome cultural differences.

b  MOD and Modus have agreed a common goal 'to work together and develop a strategy which delivers on time an environment that will satisfy the majority of users and one where the operational functions are optimum'. All parties recognise that an open and trusting relationship is essential to the successful delivery of the project.

c  MOD set up during the competition stage a partnership co-ordination team to work alongside the contractor to develop the individual payment mechanisms, audit protocols and procedures. These are now being refined, to ensure that the contractor remains incentivised to deliver the required performance standards.

d  As stated in Part 1, appropriate change procedures have been included in the contract.

e  MOD has placed importance on securing continuity of staff and the key members of the negotiating team have remained in place to ensure a smooth transition and bedding in of the contract.

f  In addition to regular customer satisfaction surveys commissioned by Modus, MOD has recently conducted a comprehensive staff survey to assess the level of satisfaction with the serviced accommodation provided in decant.

g  Senior officials retain a close interest in the project and meet with Modus' shareholders on a regular basis.