The profile of the public partner's PPP management workforce typically comprises a mixture of permanent and temporary internal employees and private sector contractors and consultants (externals) that are engaged on a fixed-term basis to augment available skill-sets. PT14 asserts that, in some cases, there is potential to improve VfM propositions e.g. through productivity efficiencies and capability building by using highly skilled contractors and consultants to fulfil specific requirements or to deal with particular issues. However, a potential risk for the public partner of relying too heavily on external contractors and consultants is that they may not adequately (or even be requested to) transfer appropriate technical knowledge to public employees (PT05), nor act in a timely way, which may result in the public partner paying high market rates for longer than necessary or being left unexpectedly to deal with skills-gaps if the external providers should leave suddenly. It is important that the public partner develops an appropriate level of in-house expertise at an individual PPP project level to lessen the impact of such risks. PT05 opines:
'Corporate knowledge and continuity of that corporate knowledge [needs] to be maintained [better]...the current structure within the Victorian government doesn't recognise and give enough value to that.'
Apart from providing formal learning opportunities, on the job training, opportunities for attending contract management forums and other types of professional development (PT08; PT03; PT10) for employees to improve their commercial, legal and negotiating knowledge and skills, etc (PT05; PF12; PT04; RK07; PT03), the public partner can bolster its contract management capabilities by:
• Developing better knowledge continuity between project phases e.g. by having an operations specialist involved in procurement and delivery decision-making and for understanding the key background issues and relationships (PT04; PT10; PF13);
• Creating and maintaining a document library for corporate and commercial documents (PT10; PF08; PT11; PS04) e.g. through a single online repository;
• Applying its contract management/administration manual more effectively and ensuring its currency (PF13; PT14);
• Improving succession planning (PT10; PF07) and the hand-over process more generally, including intellectual property matters (PT12); and
• Implementing and maintaining a detailed 'calendar of deliverables' tool, based on contractual outputs, for monitoring performance (PF12).
In addition to improving employee capability and knowledge management within individual PPP projects, interviewees (PT10; PF12; PF04; PF11; PT03; PF06; RK10; PT13; PT12) discussed the potential of the public sector to develop economies of scale across multiple projects. Interviewee PF11 points to a failure of successive governments, to take a long-term view of contracted PPPs including committing resources needed to truly understand the commonalities that exist across projects, especially those that could ultimately improve quality outcomes and drive down recurrent expenditure. With regard to the current role of the Victorian Department of Treasury and Finance in relation to the PPP project operating phase, PT10 comments:
'Treasury is an absolutely critical stakeholder but are they well geared to managing or facilitating that pool, that resource, or that function? Their traditional role is being...the source of advice around, not just budget settings, but procurement and risk. Don't confuse it with service delivery - absolutely be a stakeholder, be an owner or be a client for that but not the source or host for that type of thing.'
Supporting this view, PF12, PF06 and RK10 see value in the creation of a centralised public sector agency model for managing PPP business, i.e. a dedicated business unit that would manage the spectrum of PPP agreements and contracts, thus making it easier to develop the requisite depth of employee knowledge and capability in a more structured and standardised way, whilst reducing the costs that may otherwise be paid to expensive contractors and consultants to deliver similar management requirements across a number of projects. Although this may be a potentially effective solution in principle, there is a challenge over how such a unit would be governed in practice. For instance, PF04 raises questions about how the unit might relate to individual departmental and statutory authority heads who have responsibility under financial management acts for activities within their portfolio and who would be given precedence in decision-making. The feasibility of such a unit could be further complicated by a lack of critical mass of PPP projects within individual Australian jurisdictions; there may not be sufficient skillsets to develop and then maintain necessary expertise (PF04) due to the small number of projects currently in the pipeline - unless such a unit were to be established at the federal government level and given responsibility for all projects across all states and territories (PT13). Contemporary political realities in Australia suggest that transfer of all responsibility for PPP management to federal level would not be regarded favourably by all state and territory authorities.