Organisational culture, including selecting a practical approach for managing contract oversight, is likely to impact on whether intended VfM outcomes are achieved (Edwards, Bowen and Stewart 2005; Ernst & Young 2008, p.13; National Audit Office 2009, pp.54-55; Weihe in Hodge, Greve and Boardman 2010, p.520) during the operating phase of PPPs. This claim is supported by the interview findings. It appears that in practice, the realisation of VfM will require active management of tension that exists between the need for better partnership relations i.e. using a 'give and take' approach, or using a more formal, compliance-oriented i.e. a 'black-letter' approach to achieve stated outcomes. The degree to which one approach is selected over the other should depend on specific circumstances; decision-making can have far-reaching consequences and associated risks ought to be properly assessed. The challenge of selecting the right approach is articulated by RK05:
'Focusing on managing the contract to the exclusion of managing the relationship is likely to result in a loss of opportunities to improve VfM outcomes. Conversely, focusing on managing the relationship to the exclusion of managing the contract is likely to undermine a party's legal position and hence also detract from VfM. The key is to manage both the contract and relationship in a way that promotes VfM outcomes'.
From a performance management perspective, it may, under certain circumstances, be preferable for the private partner to be given an opportunity to resolve operational lapses rather than the public partner rigidly applying abatement for all instances of underperformance to encourage positive working relationships. In other words, knowing when to apply abatement and when to allow flexibility can be strategically important with respect to building and maintaining effective partnership relations. Such flexibility, however, should not occur to the detriment of longer-term achievement of VfM outcomes.
In addition to applying mechanisms for reducing negative behaviour and/or underperformance, public partner decision-makers should encourage positive behaviour in their partner through incentives that drive the 'right performance' culture (PF05). An example of this type of behaviour is, and defined by PF03, as where the private partner performs 'above and beyond the call of duty' - such as beating minimum response times for asset maintenance. Such behaviour may foster a stronger 'working together' culture between partners, and if consistently displayed by the private partner and sufficiently recognised by the public partner, this type of value adding could be formally recorded e.g. in a performance register, and used as part of wider criteria for assessing the feasibility of contract variations, for instance, or even future project tenders.
Flexible attitudes may also reduce the potential for serious conflict, where one partner fails to meet the expectations of the other e.g. where the intent of a service specification has been misunderstood or where a KPI has not been adequately defined. Disputes can occur because the private partner has a different idea of the service it is supposed to be delivering or how wording contained in contractual clauses should be interpreted. Different perceptions and interpretations can therefore have a profound effect on achieving VfM outcomes where the 'word' can outlive the 'intent' in agreements.