Contract administration resources

The procurement phase and construction phase of a Partnerships Victoria project are considered to be high value and high risk. Consequently, these phases require sufficient procurement team members, advisory resources and budget to be allocated. During the construction phase, the project needs to retain sufficient resources and budget, typically managed by the project director and the carryover procurement team. The service delivery phase is considered lower risk once steady-state operations have been achieved. 

During the procurement phase, the government party (or procuring agency if applicable) should take steps to confirm or recruit the resources needed to manage the contract during both the construction phase and the service delivery phase. Usually, the project director and the members of the procurement team remain engaged with the project during the construction phase to manage the design and construction process. 

It is common for the project director and members of the procurement team to leave the project once commercial acceptance is achieved. In this case, the procurement team and the new contract management team must work closely together to transition the project from the construction phase into the service delivery phase. This close working relationship will also ensure that the contract management team is 'up to speed' on the project from the beginning of the service delivery phase. 

The contract management team is responsible for a complex high-value project and for delivery of important services during the service delivery phase. This means that prior to the service delivery phase commencing, the government party must allocate sufficient and appropriate staffing, consultancy and other budget resources to enable efficient and effective contract administration during service delivery. 

Determining the appropriate resources will require the government party to:

•  identify contract management team obligations - both contractually and more broadly - and their resource intensity;

•  consider the volume of the private party's reporting requirements, including service performance KPIs that require monitoring;

•  consider the extent to which the contract management team will delegate direct monitoring of service performance KPIs to another government entity (e.g. Department of Health and Human Services will delegate direct monitoring of service performance KPIs to a local health service hospital);

•  assess the range of project risks and issues and identify the expertise required to monitor and respond to those risks;

•  determine the extent to which that expertise should be sourced internally or from external consultants - this will influence the relative staffing and consultancy resource requirements;

•  consider whether the contract management team has appropriate resources for the acquisition and operation of technical support systems (e.g. there can be sizeable costs in establishing and operating electronic knowledge and information technology platforms); and

•  consider whether the allocated budget for the range of contract management activities is sufficient.

Another important factor in determining resource requirements will be whether the relevant government party has an existing Partnerships Victoria contract management team in place. If such a team is in place, additional resources required may be less than if a contract management team needs to be established from scratch.

It is also important to be aware that the contract management resources needed to manage a Partnerships Victoria project will vary significantly from project to project and over the lifecycle of individual projects. For instance, there is likely to be a need for greater resources during major change events, such as a State-initiated modification or augmentation to expand the asset.