Reflecting on Contract Management issues in Western Australian Auditor General’s Report

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Reflecting on Contract Management issues in Western Australian Auditor General’s Report
Introduction
The reflective analysis allows in-depth learning through recollecting main ideas and
principles from knowledge. In the current reflective learning process, the Western Australian
Auditor General's Report regarding WA Schools Public Private Partnership Project dated June
2018 has been analyzed. Learning from the entire course is applied in the identified scenario to
understand its implications in the author's own career and professional environment.
Pre and Post Contract Management Issues
The contract undertaken by the State with the EduWest consortium in the year 2015 was
under a Public Private Partnership (PPP). The preliminary issues identified with the contract was
a lack of clarity. However, some other aspects pre-contract issue includes the inability to form
and apply contract management principles, failure to device a financial plan for the stated
project, inability access risks for the entire project1. While there have been several contract
management issues as well.
Lack of Clarity: Though the project has well-stated objectives yet it aimed at
implementing its program across merely 1% schools. In absence of lack of clarity, the project
often becomes daunting and both parties are at significant risk into signing a contract without
1 Rene G. Rendon, ‘Contract management process maturity: Empirical analysis of
organizational assessments’, (NAVAL POSTGRADUATE SCHOOL MONTEREY CA
GRADUATE SCHOOL OF BUSINESS AND PUBLIC POLICY, 2009), 26

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being entirely sure of it. The long duration of the project implies several outcomes which will be
expected from the project.
Lack of Contract Management Skills: The lack of contract management skills in project
parties led to the absence of contract lifecycle management. Summaries of the main services and
conditions were hence not visible alongside the contracts. Though the auditor stated that the
project was on track yet, there was no effective methodology to evaluate it. This, in turn, makes
the contract more complicated and longer to view at higher levels. Application of contract
management principles enables reviewing services and conditions alongside discussion panels. It
also enables ease of communication amongst different parties. Therefore, such communication
prevents the opportunity for dispute amongst parties.
Lack of engagement: One of the largest pitfalls of this project is the lack of engagement
of parties to the project. Though there was presence governance yet the DoE lacked contract
management tools, hence the project could not take the full advantage of the PPP learning. There
was dedicated contract staff that determines the detailed functioning of the project, however,
there was no contract management plan or audit or inspection program. Monitoring was also
absent in the required contract. In such high-value contracts where there is a present a
tremendous amount of financial resources, contract management tools ensure building
maintenance along with other services to meet the contract specifications.
A level of engagement allows initial parties to draft the contract encompassing all
appropriate internal teams such that review of workflow processes can be customized. Workflow
processes are integral such that the right approval process is integrated prior to the contract I sent
across to third parties. The benefits of such a workflow process are to ensure stakeholders get

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appropriate visibility of the contracts implemented such that it can be managed with a high-level
view.
Protracted Negotiations: The project has another complication of an extended
negotiation. The length of the contract, as it was implemented for a period of 32 years can itself
create difficulty in the communication process. Such lengthy project delays outcomes and makes
difficult to realize revenues from the project, longer lead times and a potential money loss for
parties involved in the project2. There are considerable risks involved in such projects of longer
durations.
Lack of Risk Management: The project has not adequately identified the possible risks
with its implementation procedure. In the entire project lifecycle, there is bound to be certain
amounts of risks involved. Identifying the possible risks would enable focusing on the important
aspects, build a better contract management plan for the management of risk.
Lack of financial planning: One of the most integral missing elements in contract
management is the lack of financial planning. The project has not adequately identified the
financial plan and made suitable budgetary allocations. The project plan is rather general in its
terms and the financial resources are devoted to the entire project and there is no segregation of
items based on item heads.
Analysis of recommendations & process improvement
The recommendations provided in the report are related to the implementation of contract
management and training. The report strongly recommends developing a contract management
2 Uher and Davenport, ‘Fundamentals of building contract management’, (UNSW Press,
2009), 13