Issue management usually comes into effect when significant risks arise or materialize. The PPP contract management manual should include issue management procedures that deal with irregularities and mitigate the issues that lead to risk materialization.
Conflict and issues typically occur within a contract when a problem occurs. Therefore, a key aspect of a partnering relationship is the resolution of problems quickly, efficiently, and without dispute. This can be achieved through, for example, the following defined mechanisms:
- Documented discussion and formal note of agreement;
- Harnessing the contractual change mechanism so that the issue does not affect the overall affordability of the project;
- Agreed arrangements for change to the procuring authority’s performance requirements and the private party’s method statements; and
- Regular scheduled meetings with attendance by key stakeholders from both parties.
Issue management procedures are normally left to individual PPP contracts to arrange the most suitable way for the parties to avoid disputes and the development of a blame culture. However, the basic tenets of a collaborative problem resolution methodology are to develop a systematic approach, incorporate an agreement to seek win-win solutions rather than parties to blame, create a culture of open discussions and equality of rights, and to acknowledge that adversarial attitudes waste time and money.
In the Docklands Light Rail project in London, UK, the procuring authority and the private partner ensured close coordination and open communication by maintaining offices adjacent to one another. This provides an example of the practical steps that parties can take to encourage the early detection and resolution of issues.