15 National Savings and SBS have established a joint governance structure for the contract. To help monitor the contract at a strategic level and on a day to day basis, National Savings has established a relationship management unit which includes professionally qualified senior staff who negotiated the contract. The unit has developed a manual of new business management processes and has introduced new business reports to help ensure that management of the partnership is effective.
16 In addition to the transformation of operations and the introduction of new products, SBS has to meet and exceed 42 key performance indicators spread across eight areas of operational services, designed to measure accuracy, timeliness and quality of service to customers. To monitor SBS's reporting of performance satisfactorily, National Savings has increased the resources it devotes to these tasks and plans a further small increase.
17 The contract includes a comprehensive list of events which can lead to default. In particular, poor performance by SBS can lead to default and termination of the contract. National Savings may also terminate the contract for any reason after the first two years but must give 12 months notice and pay compensation if SBS is not at fault.
18 In such a long contract it is inevitable that there will be constant changes as the business environment, market place and technology move forward. Formal change processes have been put in place to manage and control this. Accordingly, both partners have agreed roles and responsibilities within their respective organisations to facilitate the agreement of contract changes. It is also essential to include clear arrangements to apply at the end of the contract period or earlier termination, so that National Savings are free to choose an alternative supplier through a competitive process. In a pre-handback period, one year before expiry of the contract, SBS cannot alter the terms of employment of staff, dispose of any assets or alter key contracts with suppliers. During the contract, where assets are shared, SBS and National Savings must jointly agree the appropriateness of third party business proposals and maintain the transferability of assets at the end of the contract.
19 Nevertheless, to the extent that SBS succeeds in winning significant amounts of third party business, a proportion of staff and assets may well be employed on both National Savings and third party work. Without proper control, the detailed handback procedures which are included in the contract may not work well. It is therefore important that the contract should be varied (using agreed change procedures) to ensure that the handback provisions remain workable.