Module 18: Managing PPPs

18.2. Who manages the contract?

Outputs...
    ... Defined roles of each partner at the contract management stage
       ...Renegotiation option and its elements

Consideration must be given to how the contract will be managed as early as possible in the procurement phase of the contract. Identification of a dedicated contract manager from within the municipality to supervise implementation on behalf of the municipality is one of the key aspects of contract management.

The contract manager should be a part of the entire partnership process from planning and organizing [Tool 3] all the way the contract closure. If that is not possible, then another team member should be given specific responsibility for considering the emerging contract throughout the procurement phase from the perspective of that contract’s eventual management.

Ideally, the contract management team should start to take up their respective posts during the procurement phase, so that there is a seamless transfer of skills and experience from procurement, through implementation and on to contract management. In particular, the authors recommend that the contract should include/address the following issues:

◊ What is the form of the team required to manage the contract (its size, skill set, roles and responsibilities)?

◊ What will be the contract change procedure (in case of contract renegotiation)?

◊ What will be the performance monitoring arrangements and the associated information requirements for that monitoring?

◊ What will be the mechanisms for problem solving and dispute resolution [Tool 20]?

◊ What arrangements exist in the event of default or termination?

◊ What protection is there of the public sector’s ability (right) to re-tender upon completion of the original contract?

As with all the other elements of the PPP, it is essential that the individual or team managing the contract has a clear understanding of the requirements of the contract and the thought processes behind those requirements. There is a danger that once the PPP deal is signed, the project team will break up; from then on, a full understanding of the contract requirements and their underlying justifications may be lost by the contracting authority.

One of the other possible pitfalls of contract management is excessive interference by the municipal management team into the details of the project. While an in-depth knowledge of the details is important, the contract manager’s work should not undermine the performance goals of the project and/or create confusion about accountability.

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