A formal review of the project performance, including the appropriateness of the KPIs, should be completed in the first year after commercial acceptance. The review should start as early as possible, to take advantage of the availability of the procurement team.
The formal review may establish that the actual project circumstances differ from the circumstances jointly expected by the parties at the time of project deed execution. If so, the government party should consider:
• whether the consequences of the unexpected circumstances should be borne according to the contractual allocation of project risk; or
• whether an amendment to the project deed (or other project contracts) should be negotiated to better ensure the achievement of the project objectives.
For example, it may be appropriate to recalibrate the KPIs documented in the project deed to ensure they are meaningful and relevant to the project. In recent projects, the project deed provides that a function of the project control group (see section 4.2) during the service delivery phase is to discuss the application of the payment mechanism and agree to any changes to the regime if required.
Further formal reviews should be undertaken at various stages throughout the project lifecycle to assess whether the project is delivering value for money. Determining value for money can be informed by comparing outcomes against the target benefits articulated in the full business case, and as expanded into more detail in the contractual KPIs, and against the estimated costs.
The gateway review benefits evaluation review (gate 6) provides a high-level qualitative framework. Where a review happens later in the project lifecycle, it will need to consider the changes made to the project deed (and associated project contracts) over time to reflect evolution of government requirements. Gateway reviews are arranged by the gateway review Team in DTF and are applicable to all high-value high-risk projects.
Government parties may also wish to commission their own more specific reviews on project matters through their own internal audit group or engagement of a specialist independent third party.
To obtain the most value from such reviews, it is recommended that they be undertaken by independent parties and report to the senior responsible owner.