25. The focus here is to ensure that the project has effective governance and leadership, involving routine engagement at senior levels. Where projects proceed without these in place they are often insufficiently mature at key decision points with the result that later stages of the deal take far longer than should be the case, valuable MOD and Industry time and resources are wasted and, in the worst of cases, the entire procurement can be jeopardised.
26. A good governance structure will ensure that:
• the project is actively owned, sponsored and directed at a senior level within the department, with a single post having accountability for delivering the required project outcomes;
• an effective project management structure is in place and fully resourced to manage the project effectively;
• effective and open communication and reporting processes are in place to ensure that all stakeholders are appropriately consulted and informed on project business.
27. The need for an effective MOD governance structure is not unique to PFI projects. It is important, however, that the governance structure for PFI projects during the preferred bidder and operational phases includes a "joint" forum where both MOD and industry are represented. This will help to overcome the potential for 'off-line' senior stakeholder discussions with the Contractor and shareholders to take place and possibly undermine positions achieved during negotiations at the working level.
Relevant Government policy/guidance:
• HM Treasury guidance "Project Governance: a guidance note for public sector bodies"
• Association for Project Management "Directing Change: A Guide to governance of project management"
• OGC Common causes of project failure