Good governance requires that powers to enter into and administer government contracts are only exercised by people with the authority to do so. Under this principle, a project deed is executed following compliance with a series of government approval requirements, set out in section 6 of the Partnerships Victoria Requirements. The project deed requires the government party to exercise various functions, rights and powers.
However, as a practical necessity, contract management personnel exercise many of these functions, rights and powers. These personnel, principally the senior responsible owner and the contract director, are generally authorised to act on behalf of the government party, and to make the financial commitments, within certain parameters, necessary to manage the project.
It is vital that the contract director has the necessary authority to take action which is required to comply with the government party's obligations under the project deed (and other project contracts). In some cases, the level of monthly/quarterly service payments may be such that they require approval of the senior responsible owner. In some projects, action by other stakeholders may be required for the government party to comply with its obligations under the project deed. In these circumstances, a mechanism must be established so that an appropriate person - for example the contract director, senior responsible owner or a Minister - can direct those stakeholders to take action that is necessary to ensure that the government party complies with its obligations.