Contingency planning is vital to a Partnerships Victoria project to ensure the government party is prepared in the event of service failure by the private party. While the private party is financially accountable and the first point of redress, the government party retains ultimate accountability to the community and may need to act to manage the consequences of a service failure.
The contract management team needs to regularly assess current risks and issues, and scan for potential new risks and issues.
Specific planning for some potential contingency events can be warranted, such as a private party default leading to a partial or full loss of services. However, given the range of possible major events that could cause a loss of services or other material concern, it is likely to be more effective (and efficient) to develop a contingency management framework that can be applied to any event.
If unexpected events do occur, there may be a need to add resources to the contract management team at short notice, including bringing in external advisers. It is critical that budget funding for such resources can be readily accessed, as necessary.