The implementing agency needs to ensure the private party meets its obligations under the partnership, by monitoring outputs, or service standards. This does not generally involve detailed monitoring of construction, which is the responsibility of the private party. Instead, it means monitoring against the performance indicators established in the contract, as described in Section 3.4.1: Performance Requirements. The 4Ps guide to contract management for PPPs [#229, pages 28-36] provides an overview of managing service performance (focused on government-pays PPPs), and a checklist of key issues.
As described in Section 3.7.1: Establishing Contract Management Structures, monitoring service performance and contract compliance is often the responsibility of the contract manager and management team. For PPPs in sectors that are regulated, the sector regulator may also undertake some or all monitoring responsibility. In either case, sources of monitoring information can include:
• Data provided by the private party. Typically, the private party is responsible for providing project performance data in regular reports to the contracting authority. The content, format and frequency of these reports should be specified in the contract. For example, the Partnerships Victoria Contract Management Guide [#20, pages 54-55] describes how reporting requirements can be specified, including suggested templates for the different contract stages
• Independent experts can be used to carry out checks on construction, maintenance on service standards, while avoiding concerns of bias in results. For example, the Partnerships Victoria Contract Management Guide [#20, page 55] describes how independent reviewers are used at construction and service delivery stages. India's guidelines on monitoring PPP projects [#145, page 8] also describe the use of an independent engineer to monitor compliance during design, construction, and operations
• Service users have a wealth of information on the quality of service and the prevalence of faults, which the government can draw on by setting up processes for feedback. For example the 4Ps Guide to Contract Management [#229, page 33] describes a helpdesk, to be established by the service provider, as a good practice.
These arrangements should be specified in the contract, as described in Section 3.4.1: Performance Requirements.
The implementing agency also needs to ensure enforcement mechanisms are implemented as appropriate, based on the monitoring information received. This could include adjusting payments (for government-pays PPPs) following the rules in the contract, or in severe cases, calling performance bonds. It also includes communicating with the contractor, and monitoring attempts to rectify performance shortfalls. Finally, it could include identifying if and when trigger points are reached for default, step-in by the lenders or the public party, or termination (see Section 3.7.3: Dealing with Change).