WA Schools Public-Private Partnership Project Audit Report

Pre-Contract Award

Description

The report by the Auditor General of Western Australia presents the findings of an audit that focused on the WA Schools Public-Private Partnership (PPP) Project. The project began in 2015 when the WA government signed a contract with EduWest “to design, build, finance and maintain 8 schools until 2047.”¹. Under this project, primary schools are built in one stage, whereas secondary schools are constructed in two phases. There were two central issues investigated in the report. The first issue was project efficiency and the fulfilment of contract standards and school needs.². The second issue was the effectiveness of project management and monitoring of contract performance and risks.

The findings of the audit confirmed that the project was on track as of June 2018. The project was also well-supported by analysis and followed a strong tender, allowing to cut down on financing³. However, there were some contract management issues that came to light when school operations began. First of all, the private company fulfilling the contract was under-resourced, and there were delays in maintenance staff recruitment. Secondly, EduWest’s electronic system for recording and measuring school jobs did not respond to project needs effectively. Thirdly, there were issues in the timing of staff recruitment, which affected school functioning in the first weeks of operations.

Analysis

The recommendations provided in the report could be useful for future public-private partnerships at the pre-award stage. In particular, the Auditor General recommends developing a contract management plan to ensure that operations run smoothly on all project stages. According to Yescombe and Farquharson, preparing a contract management plan is essential for public-private partnerships because it allows each party to understand its responsibilities and supports the smooth implementation.⁴. Although this recommendation is primarily for the Department of Education, it would be useful for potential private partners to design and present their vision of the contract management plan at the pre-award stage.

Another recommendation relevant for public-private partnerships at the initial stage is for EduWest to develop a comprehensive performance monitoring program and a risk-based audit and inspection program. This recommendation could also be applied by other companies willing to enter a public-private partnership. Research supports that performance is usually the critical indicator of success in public-private partnerships.⁵. Creating a detailed plan for performance monitoring, audit, and inspections would help private companies during the pre-contract award stage to draw the attention of potential public partners while also reducing the risk of contract management issues in the future.

All in all, the recommendations of the report are relevant to my personal, professional context. As a project manager, I am often responsible for ensuring that contract needs are met, and all stakeholders are satisfied with the results. The results of the audit highlight the importance of preparedness and planning during the pre-award stage. To incorporate the report’s recommendations in my practice as a project manager, I would focus on performance monitoring and contract management planning.

The former plan would allow agreeing on performance metrics prior to signing a contract, while the latter plan would help to show high contract management standards and win the partners’ trust. The programs would also help during other contract stages, including post-award, since they would help to ensure that the project meets the standards set at signing and there are no significant delays.

Post-Award Contract Management

Description

The selected report is based on the audit of the Office of Auditor General of Western Australia into the WA Schools Public-Private Partnership Project. With regards to post-award contract management, the project covered two essential issues. On the one hand, it reviewed the compliance of the project with specified timelines and contract standards⁶. On the other hand, it evaluated project management and contract performance monitoring applied as part of the project⁷.

The findings of the report suggest that, while the project was on track with school opening, there were some contract management and project management issues affecting its initial performance. Namely, the results highlighted the inadequacy of resources for school opening, the failure to recruit all the required staff in time for the first semester, and contract modifications that resulted in additional costs.⁸. These findings and the recommendations provided in the report can help to enhance contract management at the post-award stage.

Analysis

The key recommendations of the report in relation to contract management include developing “a contract management plan and other manuals for opening schools and managing the school operations phase of the contract.”⁹. This recommendation is based on the evaluation of project success in terms of school opening and operation. Nevertheless, it can also be applied in other contexts involving multi-phase projects. According to Walker, the systems approach to project management involves understanding the relation of different project phases or functional systems to one another¹⁰.

In the post-award contract management context, this means that different stages of the project should be planned as a whole rather than consecutively. Using the example provided in the report, contract and project managers could review the standards of project planning to ensure that future project stages run smoothly.

The recommendations on contract performance monitoring provided by the report are also crucial to post-award contract management. In this section, the Auditor General recommends developing a performance monitoring program and a risk-based audit and inspection program. When translated into the post-award contract management context, the recommendations highlight the need to review project performance measurement approaches and conduct internal audits and inspections.

Reviewing how project performance is monitored can help managers to avoid gaps in evaluations and prevent contract management issues from arising. Additionally, internal assessment can assist in identifying project issues before they have an impact on performance and contract fulfilment. They could also help in managing risks and costs, which are of crucial concern in PPP projects.¹¹.

The third important recommendation is developing a framework “to formally review and assess lessons learnt during the project and plan how benefits will be adopted in new schools.”¹². Although this recommendation concerns the public authority, it could also be beneficial for private contractors. While contingency plans help to determine how a project could adapt to changes and risks, they rarely include problem analysis and its application to future project stages.¹³. When a contract management issue arises, analysing it and incorporating the results of the investigation into future project planning could help to avoid similar problems in the future.

As a project manager, my goal is to ensure that projects run smoothly. Nevertheless, planning for various contract or project management issues is part of my duties. The lessons learnt from the report will be useful in my personal, professional context since they highlight ways of preventing problems and minimising their impact on the outcomes. Applying the report’s recommendations in my work will thus assist in improving contract performance and contingency planning.

Bibliography

Liu, Junxiao, Peter E.D. Love, Jim Smith, Michael Regan, and Peter R. Davis. “Life Cycle Critical Success Factors for Public-Private Partnership Infrastructure Projects.” Journal of Management in Engineering 31, no. 5 (2014): 1-7.

Liu, Junxiao, Peter E.D. Love, Peter R. Davis, Jim Smith, and Michael Regan. “Conceptual Framework for the Performance Measurement of Public-Private Partnerships.” Journal of Infrastructure systems 21, no. 1 (2014): 1-15.

Spencer, Caroline. “WA Schools Public Private Partnership Project.” Office of the Auditor General Western Australia. Web.

Van Den Hurk, Martijn, and Koen Verhoest. “The Challenge of Using Standard Contracts in Public–Private Partnerships.” Public Management Review 18, no. 2 (2016): 278-299.

Walker, Anthony. Project Management in Construction. 6th ed. Hoboken: John Wiley & Sons, 2015.

Yescombe, Edward R., and Edward Farquharson. Public-Private Partnerships for Infrastructure: Principles of Policy and Finance. 2nd ed. Oxford: Butterworth-Heinemann, 2018.

Footnotes

1. Caroline Spencer, “WA Schools Public Private Partnership Project,” Office of the Auditor General Western Australia. Web.
2. Ibid.
3. Ibid.
4. Edward R. Yescombe and Edward Farquharson, Public-Private Partnerships for Infrastructure: Principles of Policy and Finance, 2nd ed (Oxford: Butterworth-Heinemann, 2018), 261-262.
5. Junxiao Liu et al., “Life Cycle Critical Success Factors for Public-Private Partnership Infrastructure Projects,” Journal of Management in Engineering 31, no. 5 (2014): 3.
6. Spencer, “WA Schools.”
7. Ibid.
8. Ibid.
9. Ibid
10. Anthony Walker, Project Management in Construction, 6th ed (Hoboken: John Wiley & Sons, 2015), 34.
11. Junxiao Liu et al., “Conceptual Framework for the Performance Measurement of Public-Private Partnerships,” Journal of Infrastructure systems 21, no. 1 (2014): 2.
12. Spencer, “WA Schools.”
13. Martijn Van Den Hurk and Koen Verhoest, “The Challenge of Using Standard Contracts in Public-Private Partnerships,” Public Management Review 18, no. 2 (2016): 282.