In a Partnerships Victoria project, the government party's primary contractual relationship is with the private party which is usually an SPV. The project deed will generally stipulate that the private party must nominate a person to be its representative with this appointment (and any subsequent replacement) requiring the approval of the government party. It is important also that the private party representative is adequately supported by an internal SPV team. In the early days of Partnerships Victoria projects, there was a tendency by some SPVs to under-resource their SPV teams and attempt to have the government party deal directly with subcontractors. However, in more recent times, the private parties have understood the need to appropriately resource their SPV team and have it perform the key interface role with the government party.
As most of the SPV's obligations under the project deed are subcontracted, in more recent Partnerships Victoria projects it is common for the project deed to identify key people within key subcontractors to the private party, who cannot be replaced without the government party's written approval. During the service delivery phase, these key people may include senior operator personnel (in a full-service PPP) and senior facilities management personnel.
While the government party may wish to monitor a subcontractor as part of its monitoring of the overall health of the project, the contract director must remember that it is the private party that is obliged to provide the services, and has the direct contractual relationship with the government party. As a general rule, the government party should not involve itself in the private party's management of its relationship with its subcontractors.
Beyond its direct role in appointing key people, monitoring management quality is difficult and largely falls into the 'soft' indicator category. Nevertheless, an experienced contract director should regularly monitor the quality of the private party's management and operating personnel, looking for weaknesses or trends that may provide an early warning signs for future issues.