PSP60616 Advanced Diploma of Procurement & Contracting – Block 2 – Activity 14 – Relationship Management

CASE STUDY: WHAT “PARTNERSHIP” REALLY MEANS FOR ONE AUTHORITY
An authority has an integrated contract for refuse collection and street cleansing in the borough. The contract manager wanted a partner who truly shared the Council’s objectives for the street environment.
The two parties have a legally binding Partnership Charter, which governs the relationship and fosters joint decision-making. A Partnership Board, with top-level representatives from both customer and contractor, meets quarterly to give the contract and the relationship a strategic “steer”.
Under the Charter, each partner accepts a duty to:
·       make an effort to understand the other’s obligations;
·       be just and faithful in all dealings;
·       work in the spirit of co-operation;
·       resolve differences by discussion and negotiation;
·       communicate clearly and effectively;
·       seek to achieve savings to the benefit of both partners; and
·       give early warnings to the other about mistakes or problems.
 
To do this, the partners have committed to:
·       work alongside each other and not in separate rooms;
·       sharing communication and information systems;
·       encouraging secondments and joint training and induction of staff;
·       jointly monitoring costs through “open-book” accounting.
 
Four “innovation forums”, composed of people from both partners, develop proposals for service improvement and greater cost-effectiveness and anticipate proposals for any change in the service that may be required. An innovation fund is available to support the development of ideas and get them put into practice.
“Our style is geared toward solving problems – not monitoring by statistics,” says the contract manager. “Problems are shared – we don’t punish contractors financially. Issuing defaults is not our style. There are arrangements in the contract but in seeking partnership, we do more. We aspire to act justly towards each other.
“I am not doing this service on the cheap, it’s expensive. But I have the capacity to respond to problems rapidly and fix them, and open-book accounting gives me full disclosure and the profits are capped. They need to please us because there’s a break clause after Year 8.”
The contractor can also use the contract as a reference point. They want to showcase the service to help win business from other authorities. “I believe we have maturity to acknowledge the legitimacy of profit, but with a relationship like a direct labour organisation we feel that the contractor is part of the family.”

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