Planning for the transition from one provider (often internal) to another (usually external) should commence as soon as the new provider is confirmed as the successful tenderer. As this is the period when participants first meet and the ground rules for the rest of the delivery term are set, the transition phase will determine the initial, and often the ongoing, attitudes and relationship for the contract period. During transition, the relationship will build and the
expectations of the contracting parties and clients and stakeholders will crystallise. The transition strategy needs to:
• keep the focus on the changes required; • facilitate appropriate resource allocation;
• undertake contingency planning (ie running ‘what if ’ scenarios); • facilitate open discussion on the service requirements;
• ensure full understanding of the needs and expectations of each par ty; • set the rules for the rest of the contract; and
• outline all tasks to be completed with clear responsibilities for completing them.
Table 4 provides guidance on what needs to be considered during the transition phase and possible timeframes for resolution. These can be modified to reflect the size and complexity of the contract and its importance to organisation outcomes.
The transition phase will lay the
foundations for developing the relationship and raise awareness of the needs and requirements of the arrangement
Table 4—Transition issues to consider
Issue Consider points
Industrial It is important to identify whether the contract is likely to be IR sensitive and to identify relations (IR) what aspects of the contract are likely to be most sensitive to these issues.
Familiarisation For large and complex services a familiarisation period (eg. six weeks) would allow the period transfer of known data/documentation and knowledge and allow the provider time to
recruit and train personnel, while the existing provider still provides the service. Commencement of services could be conditional upon satisfactory completion of the familiarisation period. For less complex contracts only a few days may be necessary. Key personnel The purchaser could provide assistance to the provider in the form of key personnel for
a period of, say, three months. For corporate business support activities, such as cleaning, this may not be required at all.
Resourcing The purchaser and provider need to resource up at this stage. The level of resourcing will depend upon the relationship chosen. Traditional relationships often have an
expectation that the provider’s personnel, systems and methodologies will be in place on day one of the contract term. This can be a costly assumption and is often not
considered during the tender stage. The relationship type will also affect the level of purchaser resourcing. Non-traditional relationships often require far more resources to set up, to implement during the transition period and to establish the appropriate relationships. The resource level after the initial phase should fall to a level below that of traditional arrangements as the relationship develops.
Transfer plan Include transfer (or sale) of resources such as staff, equipment, systems and information. Consider the logistics associated with transferring staff (eg. conditions) the physical relocation of assets, arranging on-site facilities and security of site and purchaser data (through systems access).
Records control Consider not only the format and quality but a realistic timeframe for implementation and alignment of systems.
Alignment of Consider how to facilitate invoicing/payment processes, provider recruitment processes business systems and purchaser involvement in recruitment processes.
Meetings A start up workshop could include:
(start-up • explanation to both purchaser and provider personnel of their rights and obligations & ongoing) under the contract. In complex cases a lawyer could be used to confirm the provider
understands the conditions; • resolving cultural differences; • purchaser/provider alignment; and • payment regime based on milestones.
Occupational Establish clear guidelines on OH&S and security with the provider. Health and Safety
Further detail on specific transition issues can be found in Appendix 2. Ensuring that the issues listed in Table 4 are considered can be as simple as compiling a list of processes required in preparation for commencement. One means of facilitating this result is through the development of a procedural manual. The procedural manual starts with the provisions of the contract and sets out the contract management processes to be used to meet the contractual terms. It should be prepared jointly by the purchaser and the provider during the transition period. Where the contract is significant in terms of size and/or complexity and is important to the delivery of outcomes, it is particularly important to ensure continuity, especially where there is a turnover of personnel within the purchaser and provider organisations.
Procedural manuals for traditional contracts tend to focus upon processes for payments, work scope, variations, cost control, quality assurance, reporting and practical completions in accordance with the control and compliance focus of traditional contracts. A manual for non-traditional arrangements should cover these and other issues required for managing contracts with more flexible and cooperative arrangements. Table 5 illustrates a typical table of contents for a procedural manual11.
Table 5—Procedural manual—example of typical content
Part of manual Typical contents
Meetings and workshops • schedule of meetings • start up workshop • monthly meetings • quarterly reviews
Work scope • brief description of scope
• how to vary
Variation order • adjustment of prices
Cost control • mechanisms and processes involved in
cost control
Practical completion • what defines practical completions • delegates or approving officers Quality assurance requirements • records to be kept
Payment of invoices • key dates
• format of invoices • certification
Estimate request • method of preparing estimates
• estimate guidelines
Work order • process for raising work orders
Performance measurement • collection of data
• evaluation of performance • reporting of information
Reporting requirements • specify requirements and obligations of both parties
Contract documentation • how is it updated
• who keeps the original and receives copies
Appendix 3 provides a checklist for the appointment of providers to ensure that the key issues discussed above are addressed.