Understanding each other

It is important that the contract management team understands the interests and composition of the private party, as this will influence the contract management team's actions (refer to section 2.7 of this guide for additional detail). 

A strong relationship can be developed by engendering a culture of sharing appropriate information. The types of information that can be of benefit if shared include:

•  objectives and expectations of each party - these are set and shared early in the procurement phase, and remain central to service delivery. They should be revisited regularly. It is important that the parties also understand each other's higher-level expectations, strategic objectives and potential for changes to service needs. By managing each other's expectations, the parties can minimise surprises, and better manage the project and potential change events for their mutual benefit;

•  plans and information about potential future directions - these can help ensure the parties develop the relationship in line with changes to business needs. At the start of the relationship, senior management must ensure that both parties have similar aspirations in relation to their approach to business (for example, the relative importance of commercial approaches to resolving contractual issues), common goals and strategic ambitions. This needs to be developed throughout the project lifecycle, and it should be a two-way process. An understanding of where the private party sees its business heading is as important as the government party's own expectations when it comes to maximising opportunities for consistent objectives and better managing divergent positions;

•  an issues log - this outlines the outstanding issues between the parties, allocates responsibilities, sets timelines and current status can help monitor and resolve issues. A common issues log should be shared by both parties, ideally through an electronic knowledge management platform. The State contract management team may also retain a separate State issues log for the project, for issues that do not need to be shared with the private party. It can be beneficial to set up the issues log so that the issues can be sorted and filtered in different ways (for example, by the date the issue was raised, by the target date for resolution, and by the status of the issue);

•  concerns about the wider relationship - these should be discussed frankly, whether they relate to contract performance, progress, or people. If this is not done, there is a risk that problems will increase in seriousness; and

•  information about how the private party views the government party - the focus should be on providing and seeking information with a view to improving the relationship over time, rather than unnecessarily apportioning blame. The government party should seek such information if not freely provided by the private party. A candid approach should be encouraged, although there is a need to avoid being defensive about criticism.

The government party should not just passively receive information about the private party. Information should also be analysed and synthesised into the contract management tools and processes. A useful tool to assist in understanding the private party's business is a SWOT (strengths, weaknesses, opportunities, threats) analysis. 

The information collected also forms part of the broader information matrix of factual background for other contract management processes and tools. Information collection for overall contract management purposes is discussed in detail in Section 5.4.