Agencies and their public officials are accountable for the use of public funds and the consequences flowing from their use, and for successful project delivery. This accountability is best demonstrated by agencies working to clear objectives in a transparent way, accepting responsibility for their decisions and actions, striving to make the best use of public resources, and submitting themselves to appropriate scrutiny.6
One of the risks with alliance contracting is that the adoption of a collaborative or a best-for-project approach to commercial negotiations or conflict resolution may not always be enough for agencies to satisfy public standards of accountability. In addition, it is important for agencies to always maintain an equal, balanced relationship with the private sector alliance Participants. If an agency forms relationships with these alliance Participants which are too familiar or unbalanced, the benefits that should be gained from a collaborative approach to project delivery could be put at risk. For example, the benefit might be lost where the agency depends too heavily on the private sector Proponent for information and advice, where the agency is 'captured' by them, and/or where the agency's responsibility to government is compromised by this dependency.7
It is important for an alliance contract to have a governance framework that clearly identifies the roles and responsibilities of all alliance Participants. In particular, a clear distinction needs to be made between the 'Owner', and the 'Owner Participants' who are part of the alliance. The Owner (who can be a Minister, the departmental head, the agency's board, etc.) may delegate certain limited responsibilities to their nominated representatives in an alliance.
Irrespective, Owners cannot delegate their accountabilities to the state8 for delivering agreed investment outcomes. These outcomes should be fully articulated in the Business Case and include both the longer-term delivery of the service benefits to the community and the capital project that the Owner considers is required to enable those service benefits to be realised. It is also important for the legal framework to preserve the Owner's capacity to assert and enforce the state's rights.
_______________________________________________________________
6 Paraphrased from the Victorian Public Administration Act 2004.
7 These matters are discussed in Guidelines for Managing Risks in Direct Negotiation, NSW Independent Commission Against Corruption (ICAC), 2006.
8 The expression 'state' here is used to denote all the government entities of Australia, which include the Commonwealth of Australia and all Australian state governments and territories.