1. Contract management beyond financial close
SESSION 7 Thursday – 15.30
Contract management beyond financial close

2. South Africa Part 5
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3. South Africa Part 5
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4. Critical success factors
Service delivery satisfactory for public and private parties
Realisation of expected benefits, vfm and innovation
Good relationship
Public sector aware of contractual obligations and has resources and expertise to honour them
Knowledge management and succession planning in place
Dispute resolution at lowest level
Variation procedures successfully used to cope with changing service requirements

5. What can go wrong? Public sector loses control – unbalanced decisions
Decisions not taken at the right time
New and existing processes do not integrate and therefore fail
People fail to understand obligations disputes
Inappropriate escalation of issues delays
Intended benefits not realised
Improved vfm and performance opportunities are missed.

6. Factors leading to failure of PPP agreement management
Poorly-drafted PPP agreement
Negotiators different from managers
Inadequate resources
Poor leadership
Skills / experience mis-match
Wrong people – personality clashes
PPP agreement not well-understood
Unclear responsibility for commercial decisions
Lack of independent review of contract management arrangements

7. Factors leading to failure of PPP agreement management
Poorly-drafted PPP agreement
Negotiators different from managers
Inadequate resources
Poor leadership
Skills / experience mis-match
Wrong people – personality clashes
PPP agreement not well-understood
Unclear responsibility for commercial decisions
Lack of independent review of contract management arrangements

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9. PPP Partnership Management
Corporate governance
Structures, systems, policies and other mechanisms of accountability in an organisation
Trust and attitudes
Cannot be mandated but positive efforts needed – behaviour and attitudes
Communication and information sharing
Good communication is make or break – operate at a horizontal AND vertical levels (see next slide)
Relationship assessment
Dispute resolution

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14. PPP Agreement Administration
Variation Management
No additional costs – perhaps a reduction
Small works variations – annual schedule of rates in PPP Agreement
Public sector variations – process in PPP Agreement
Private sector variations - process in PPP Agreement
PPP Agreement maintenance
Procedures for ensuring Agreement etc are up to date and consistent
Need for PPP Agreement manual
Financial administration
Making and receiving payments, penalties/deductions
Handling indexation
Late payments; receiving reports

15. End of Contract Issues
Challenge is to review options for service continuation and agree exit strategy
Partnership management tasks
Prepare staff for new role
Integrate lessons into public sector work
Service delivery management tasks
Assess key deliverables, vfm, innovation
Post-implementation review
PPP Agreement administration tasks
Ensure compliance with hand-back procedures
Make arrangements for compensation (early termination only)
Make arrangements for retendering the service or taking back in-house
Staff transfers