Operational PPP contract management: An operating model

Scottish Futures Trust publishes guide explaining the operating model currently in place in relation to the contract management of PPP, PFI, hub and NPD health and education projects in Scotland. 

28 April 2020

On 15 April 2020, the Scottish Futures Trust released a publication explaining the operating model currently in place in relation to the contract management of PPP, PFI, hub and NPD health and education projects in Scotland. The publication can be found here. The operating model has been in place for the last 18 months and addresses public sector collaboration in contract management.

The operating model has three levels and, by way of illustration, the operating model for Education Contracts is set out as follows:

  • Strategic Level

This sets out the SFT’s role.

  • Regional Level

This focuses on the remit of the Regional Collaborative Groups (see further below).

  • Project Level

This highlights the contract management of individual projects and the relationship with project companies and FM providers, although it recommends exploring some elements on a regional level.

Regional Collaborative Groups and ROCGs

The focus of the publication is in relation to the Regional Level and the development of regional collaborative groups. There are now seven of these groups in existence with the first being established in the North region in 2018. Five of the regional collaborative groups reflect the SFT’s hub territories, with the North territory covering health and education projects and each of the West, South West, South East and East Central territories covering education projects only (the “Regional Collaborative Groups”. There are two further regional operational collaborative groups made up of a number of health boards (the “ROCGs”)

The purpose of the Regional Collaborative Groups is to provide a forum for public sector bodies within a similar geographical region to meet and share knowledge and experience in relation to contract management. This allows members to develop common systems and processes for managing Project contracts and to work together on the approach taken in relation to common issues. The idea is to promote consistency in relation to dealings with private sector counterparts with the anticipated benefits including better service provision, increased efficiencies (including in relation to savings) and greater transparency.

The Regional Collaborative Groups will be supported by the Strategic Level, which is responsible for, as the name suggests, the overall strategic thinking in relation to the issues affecting PPP contract management including handback, energy efficiency and carbon reduction. The work done by the Regional Collaborative Groups will then support the Project Level, which is operated by the individuals who are dealing with day to day Project operations.

The ROCGs are sub-groups of a national PPP Practitioners Group within the NHS in Scotland and therefore, although the ROCGs have a similar remit to the Regional Collaborative Groups, the development of those groups is governed by a Joint Board, which includes representatives of Scottish Government, HFS, SFT and health boards.

The publication includes an example Remit of the Regional Collaborative Groups, which provides insight into the contract management objectives that the groups are seeking to achieve. These objectives include:

  1. ensuring that contractual remedies (particularly in relation to deductions) are applied transparently and accurately to ensure that the public sector only pays for what is due;
  2. conducting the relationship with the private sector on a commercial footing;
  3. ensuring variations are delivered to meet public sector timescales and requirements;
  4. conducting benchmarking efficiently and to provide value for money; and
  5. managing lifecycle and handback arrangements to ensure that the handback requirements are met by the end of the contract duration.

In order to meet these objectives, the Regional Collaborative Groups examine a number of topics. Some examples of topics already covered include: forensic review of Helpdesk records and monthly reports, the issue of Warning Notices and Termination Notices, on-site inspections, payment procedures, Variation requests, energy sharing mechanisms, lifecycle and handback. For a more detailed examination of handback, please refer to our companion article here.

It is clear that the Scottish Futures Trust wishes for the continued development of the Regional Collaborative Groups, which will provide additional scrutiny of operational PPP health and education contracts in Scotland. Shepherd and Wedderburn LLP has extensive experience in managing PPP contracts from both a private and public sector perspective. If you would like to discuss the subject matter of this article further, please contact Stephen Colliston (Stephen.colliston@shepwedd.com, 0131 473 5229), Nigel Sievwright (nigel.sievwright@shepwedd.com, 0131 473 5426) or Kara Gallagher (kara.gallagher@shepwedd.com, 0131 473 5339).