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Managing the contractual elements of strategic service-delivery partnerships (SSPs)

Initiation

  1. Invest early and appropriately in client-side management
    • Council officers undertaking procurement need to have adequate resources and the right mix of skills and experience
    • Consider carefully the transfer of staff to the contractor, and whether certain key individuals may be better placed undertaking a client-side management role
  2. Develop a budget for procurement costs and include them within the business case
    • Ensure that the procurement budget is adequate to cover the full duration of the procurement, including fees to external advisers and any contingencies
    • This budget should be included within the business case to provide an appropriate comparison with other options
  3. Understand the cost and performance baselines of those services being considered for transfer
    • Ensure that the full costs of the existing model of service delivery are transparent in the tendering process
    • Develop a clear understanding of existing performance levels
  4. Identify all potential risks as early as possible when considering an SSP as a delivery model
    • Identify risks associated with all methods of service delivery considered
    • Define any SSP-specific risks
  5. Assess the risks associated with exiting the SSP at different points
    • Consider the different levels of flexibility that the council may require from an SSP
    • Include formal break points in the contract if these are required

Procurement and contract award

  1. Monitor the level of resource committed to client-side management
    • Ensure that expenditure on client-side management is measured and recorded to provide a better understanding of the full costs of each service delivery option
    • Benchmark against industry standards
  2. Assess the cost-effectiveness of specialist advice on financial, legal and other matters, and the balance of in-house and external provision
    • Review the levels of expenditure and satisfaction with specialist advisers, and consider which functions may be undertaken in-house
  3. Be clear about how new performance indicators will be developed, and how baselines will be measured
    • Establish a protocol for the development of performance indicators, including how they will be constructed and defined
    • Provide a timescale for any baseline exercise for performance measurement
  4. Agree meaningful performance indicators
    • Ensure they focus on quality and outcomes and can be measured
  5. Allocate all risks to the party best placed to manage them
    • Once risks are identified, ensure that risk transfer is undertaken appropriately
    • Develop a clear understanding of the cost implications of risk transfer
  6. Establish a process for monitoring and reporting risks

Contract management

  1. Establish a dedicated team responsible for managing the SSP
  2. Monitor the resource committed to this team, so that management costs are reflected appropriately
  3. Review performance indicators regularly
  4. Regularly review the appropriateness of the indicators used and the extent to which they measure the right things
  5. Undertake regular risk management reviews
  6. Develop a plan for any restructuring or change of ownership on the contractor's side
    • Ensure that ownership and corporate failure risks are anticipated
    • Put contingency plans in place for any resultant service transfer

Related information

4ps

Communities and Local Government

Office of Government Commerce

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