FOR ACQUISITION TEAMS
by The Defence Commercial Director
It is no secret that we have had a poor track record of delivering to
performance, time and cost on some of our major projects. This can lead
to budget instability, necessitating ‘measures’ which can mean delays
or which cut across a wide range of programmes that are crucial to our
military capability. Partnering gives us a better chance to deliver on
target against time, performance and cost by working together with our
suppliers to solve problems, manage risk and deliver successfully.
I ﬁrst concluded that we This is the first in a number The Handbook will be
needed a Partnering Handbook of guidance documents developed to take account of
when I became aware of the designed to form part and incorporate emerging
many different interpretations of of a clear MOD business practice and will be improved
partnering to cover a myriad of approach. These guidance to meet the needs of our
contracting approaches across documents identify mandated business over time. As such
MOD. It struck me there was requirements and include it is a live document and I
no consistent understanding examples of best practice. therefore ask you to provide
of partnering and, more These documents will also my team with constructive
importantly, no standard feedback; let us know where it
be regarded as the standards
approach for MOD to use. works for you and where it does
for purposes of approvals and
not. We will incorporate any
This Handbook addresses in necessary changes and further
clear terms what partnering is best practice in future issues.
for MOD, what it is not, when This Handbook captures the
it is appropriate, how to use it principles and the direction It is clear that partnering
and when it should be put into that we will take. Over the has a valuable part to play in
practice. If it does not address coming months I will be putting the Defence Industrial
these questions, or you are issuing standardised contract Strategy into effect, and we
left with a need for further terms of business to include have partnered successfully
clariﬁcation when you have read in our contracts and more in a number of sectors
it, please contact the Directorate detailed guidance on how to and projects already. The
of Defence Commercial Policy. apply these. Handbook contains examples
of our successes and you should The existence of a partnering Best practice in relationship
read these to help identify where contract does not mean that management is an important part
partnering could be of beneﬁt in your customer and supplier have of most successful acquisition and
procurement activity. all interests in common, or procurement activity, and it is an
that the supplier will not seek, indispensable accompaniment to
Partnering is not a substitute quite reasonably, to optimise successful partnering. However
for competition, and competition their commercial interests, or partnering is not solely about
wherever feasible continues to commercial return within the relationships and the two things
be the preferred route, by which parameters of our relationship are not the same, and should not be
MoD seeks to procure defence with them. The MOD response confused in thought or language.
capability. Rather, partnering is simply requires that we wear a
a complementary approach to ‘partnering hat’ when working to As I have already said, this
both competitive scenarios and meet our shared objectives, but improved approach to partnering is
sole source situations where its just one of a number of
that we be business-like and ‘firm
deployment is perhaps essential. commercial initiatives I am
but fair’ in negotiating, responding
introducing to drive the way we will
to proposed cost variations, rate
conduct business in the future, to
Partnering is a valuable business increases etc. So, for example, it is
reduce risks, sustain continuous
tool designed to help customer and not our job in the MOD to take early
improvement and to increase the
supplier to work together for particular decisions that do not offer value likelihood of achieving mutually
purposes, generally to deal with for money due to drivers such as successful outcomes. For industry
complex, partially deﬁned or uncertain meeting the bonus arrangements this could be increased shareholder
issues over a period of time. It does so for executives among our suppliers value; for MOD it is delivering and
by creating a contractual space where simply because of the existence supporting through life military
both sides can share in the beneﬁts of of a partnering arrangement. Of capability more effectively and
success or the effects of failure. It calls course, we may accommodate them achieving better long term value for
a truce on the somewhat adversarial in return for improved terms for MOD and the taxpayer■
relationship that can occur where both MOD. It remains very much our
customer and supplier have a copy of responsibility to protect the interests
the contract and a draft writ to hand of the MOD, the taxpayer, and the
at all times. Having said that it will not Armed Forces we support, even in
remove such tensions altogether and the closest and most successful Amyas Morse
neither should it. partnering arrangements. Defence Commercial Director
Partnering Handbook | 3
1 INTRODUCTION 5 APPENDIX A: WHAT MY TEAM NEEDS TO DO 25
1.1 Purpose and target audience 5 APPENDIX B: SUGGESTED MODEL FOR RELATIONSHIP MEASUREMENT 27
1.2 Applicability and status 6
1.3 Advice and support 6 B-1 Context 27
1.4 Applicable documents 7 B-2 Factors to consider before conducting a RMR 27
B-3 RMR Process 28
2 MOD’s APPROACH TO PARTNERING 8 B-3.1 Planning 28
B-3.2 Assessment 29
2.1 What is partnering? 8 B-3.3 Workshop 30
2.2 Why use partnering? 9 B-3.4 Improvement plan 30
2.3 When is partnering appropriate? 10 B-4 Relationship Management Matrix (RMM) 32
2.4 Who to partner with 11
2.5 How to use partnering 11 APPENDIX C: AVAILABLE TRAINING 33
3 HOW TO PARTNER 12 C-1 Partnering theory and practice 33
C-2 Induction and refresher training 33
3.1 Step 1: Project initiation – vision, aims and objectives 13
C-3 Initial and follow on relationship workshops 33
3.2 Step 2: Producing partnering speciﬁc terms of business 14
C-4 Links with practitioners in other teams;
3.2.1 Governance 14
secondment and shadowing 34
3.2.2 Achieving of value for money 15
3.2.3 Incentives 15
APPENDIX D: CASE STUDIES 34
3.2.4 Transparency of information 16
3.2.5 Intellectual Property Rights (IPR) 17 D-1 MOD/AGUSTA-WESTLAND Joint Partnering and
3.2.6 Risk and opportunity management 18 Relationships Team (JPART) 35
3.2.7 Issue resolution 19 D-1.1 Why partner? 35
3.2.8 Exit strategy 19 D-1.2 Scope of partnering 36
3.2.9 Communication 20 D-1.3 Implementation 37
3.3 Step 3: Relationship management 20 D-1.4 Beneﬁts, risks and challenges 38
3.3.1 Establish the fundamental principles of the relationship 21 D-2 UK MILITARY FLYING TRAINING SYSTEM (UKMFTS) 39
3.3.2 Initial relationship workshop 22 D-3 MOD/DML PARTNERING FOR THE PROVISION OF
3.3.3 Develop the relationship management plan 23 FUTURE NUCLEAR FACILITIES IN DEVONPORT 44
3.3.4 Agree on the principles of relationship measurement 23 D-3.1 Background 44
3.3.5 Engagement with industry 23 D-3.2 How was this achieved? 45
3.3.6 Skills and training 23 D-3.3 Conclusion 47
3.4 Step 4: Compliance 24 D-4 DEFENCE INFORMATION INFRASTRUCTURE (FUTURE) 48
This It links to the commercial from complex, high-risk everybody involved in procuring
Handbook transformation objectives of procurement where partnering new projects is fully aware of
the Defence Acquisition Change may be the chosen option, right this Handbook, including teams
is one of a Programme. The Handbook down to low risk transactional responsible for non partnering
number of captures the principles and contracting. The aim of this projects, for which the
new policy direction that we wish to work is to have clear and principles and the disciplines
and guidance take and it should be used consistent contracts across should be considered on a case
in conjunction with other MOD that are legally ﬁt for by case basis.
documents in relevant policies, standards purpose; and to make it easier
preparation and processes such as ‘Route for project teams to prepare The only justiﬁcation for
that will form to Service’ devised by teams for negotiations and be clear partnering is the pursuit
part of the in DG Combat Air. In Section on what’s mandated and of better value for money
3.2, there are a number of what is negotiable. It will also which needs to be continually
high level principles that will enable MOD to be consistent
commercial drive our negotiating approach in its dealing with suppliers.
‘Fit for on key commercial issues. Ultimately, we are striving 1.1 Purpose and
Business’ It is important that project for consistent and robust target audience
project. teams become very familiar contracting approaches that Whilst partnering has been in
with these because they will reduce risk and which increase existence for several years,
form the basis of the updated the likelihood of project there has been a growing
contract terms that are being success and better overall need for consistent and
incorporated in a series of value for money. practical guidance. This needs
new standardised contract to reflect good and latest
templates, the ﬁrst of which is Whilst this Handbook is focused practice, extend the
scheduled to be available for use on major, complex partnering principles contained in the
in complex availability contracting projects, many of the principles Office of Government
in Spring/Summer 08. and business disciplines that Commerce guidelines (AD1)
describe how to work together and provide a consistent
The standardised contract effectively within a commercial partnering model, understood
templates will represent agreement will equally apply to both by MOD and industry.
the MOD ‘gold standard’ for other projects where partnering
use in different commercial is not the chosen option. It This Handbook seeks to satisfy
arrangements, ranging is important, therefore, that that need.
Partnering Handbook | 05
• Section 2 provides an overview of key factors in this Handbook have Implementation and management
the MOD approach to partnering. been addressed. In particular of all partnering contracts will
This is important for all in the partnering speciﬁc terms of be independently monitored on
Department, so that they are business must be produced (see a regular and continuous basis,
aware of what partnering means ﬁgure 1) and incorporated into a throughout the life of the
and the direction the Department legally binding contract. partnering contract.
is moving in.
• Section 3 provides a more • A Relationship Management Plan 1.3 Advice and support
detailed route map which all (RMP) must be in place and active. The Directorate of Defence
acquisition teams must comply Relationship Workshops are Commercial Policy is the first
with if they are planning a mandatory along with a point of contact on points of
partnering contract. formal mechanism for measuring partnering, policy.
1.2 Applicability and status Directorate of Defence Commercial
This handbook is mandatory for all new Policy – Partnering Policy Team:
MoD Cat A and B projects, competitive • Acquisition teams are required 0117 91 32608
and non-competitive, to measure the relationship on a DDefCP-PAT-AD@mod.uk
in that: regular basis and take steps to
improve wherever possible. The Detailed implementation advice and
• Acquisition teams must fully outcome of the measurements project support will be provided by
evaluate partnering as a and the steps taken for the Partnering Support Group:
procurement option. The evaluation improvement will be subject to 01225 467794
of partnering must be demonstrated independent assurance (from
in Procurement Strategies and outside the project).
Business Case submissions.
The overriding consideration for Projects that are committed The Partnering Implementation
partnering is improved Value for contractually will not be bound by Working Group (PIWG) is currently
Money and the evaluation must this policy unless the parties agree the joint MOD/Industry forum
consider the potential beneﬁts of otherwise. However, where major tasked with identifying and
partnering against the overhead changes are contemplated to an disseminating good practice in
that partnering brings with it. existing contract, or where a project relation to partnering. Contact
could gain significant benefit from details for industry and MoD
• Where partnering is the chosen the introduction of partnering to members can be obtained from the
option, the acquisition team must improve performance, then project Partnering Support Group.
be able to demonstrate that the teams should explore the option.
This Handbook will be reviewed AD5: Commercial Policy Group AD6: Commercial Policy Guideline
periodically and updated to Guideline No 9, Building and No 5, Codes of Practice governing
incorporate evolving good practice Sustaining Effective Relationships principles for establishing mutually
and learning from experience. Available from satisfactory relationships. Available
If you have any comments or CPG Guidelines & Notes from CPG Guidelines & Notes.■
suggestions for improvement, or if
you need further guidance, please
contact the Directorate of Defence
1.4 Applicable documents
There are a number of applicable
documents called up in this
AD1 Office of Government
Commerce guidelines [Effective
Partnering: An Overview for
Customers and Providers. OGC
OGC - Effective Partnering: An
overview for customers and
AD2 The Defence Values for
Acquisition are available on
AD3: MOD’s transparency policy
(Currently in development)
AD4: IPR strategy Available from
Partnering Handbook | 7
02 Part two
MOD’s approach to partnering
2.1 What is partnering? • Projects where non- is underpinned by a structured
In the past there have been legally binding partnering and rigorous approach to
different interpretations of charters/principles are in relationship management.
the term ‘partnering’ and place, which cover the way
variances in its practical we work with industry in Contracting in this way provides
application across MOD. delivering those projects. strong incentives for the
• Long term partnering partners to work in a more
Partnering has been used to arrangements between collaborative manner, giving
describe many different the former DLO and key a greater chance of delivering
arrangements at; the business suppliers. the capability required within
(strategic) level; the DIS acceptable performance, time
sector level and at individual and cost parameters.
All of these different
programme/project level. approaches have been
Partnering is not easy. In
described as “partnering” and
particular, it is essential
Examples that illustrate these this has resulted in confusion
to set unambiguous limits
differences are; on what partnering is and how
it should be applied. on partnering obligations
to ensure that the MOD’s
• Long term partnering
For the avoidance of doubt, objectives, rights and
agreements for the
partnering in the MoD is now remedies under the contract
DIS rotary wing sector, are not jeopardised or
where there are a set of defined as;
undermined by continued
legally binding business poor supplier performance or
agreements with Agusta “a procurement approach
that uses partnering specific poor contract management
Westland. and governance. There may
terms and conditions to
• Alliancing arrangements, enable the successful delivery also be wider legal, political,
such as the initial of joint objectives”. and presentational issues
contract on CVF which with partnering and these
requires the MOD and Partnering creates legally should be highlighted and
industry to drive towards binding obligations and hard addressed in business cases
mutually agreed goals. contractual commitments and and procurement strategies.
Partnering is not about compromise, contracts entered into under a more • They bind the parties in terms of
nor de-scoping the requirement to traditional approach in that: relationship management. The
make savings and it is not about the parties agree a formal system for
relaxation of contractual obligations • They set out the joint objectives managing their relationship which
if it all becomes too difﬁcult. of the parties whereas a includes periodic measurement and
traditional approach details improvement activity. Traditional
It is also not about simply the MoD aims which industry is aprroaches do not place the same
maintaining a cordial relationship required to meet. emphasis on the relationship
or generally working together. • Partnering considers the core aspects of the contract.
On the contrary, partnering is values of the organisations • Partnering utilises joint
about the partners committing involved and looks to align identiﬁcation, assessment and
to working together to deliver the these into values that are “best management of risk with the
joint aims. Partnering requires staff for project”. possibility of risk sharing and
to take a ﬁrm but fair approach incentives which encourage the
• Partnering considers the
when negotiating or responding to proactive prevention of those risks.
different drivers that MoD and
proposals that could change the deal. Traditional approaches generally
industry have and identifies
and agrees the common project look to transfer risk to the
Partnering is not a substitute for contractor, even where they may
drivers. Traditional approaches
competition. The requirements of not be best placed to manage it.
may identify the drivers of
the Competition Act 1988 still apply
the customer but may not
and all contracts must be placed
in accordance with all aspects of fully assess the impact of the 2.2 Why use partnering?
Competition Law. constraints upon industry in A number of common themes emerge
aligning with these. from successful partnering.The
Partnering does not come without • They are governed by a joint themes detailed below form the basis
cost both in terms of funding for management board with a of the decision to partner.
partnering activities and resource to joint decision making process
implement and manage partnering. giving both parties rights and • Overall project costs have been
responsibilities for decisions. A reduced by joint efﬁciency
How is partnering different? traditional approach has a MoD improvements against overall
Partnering contracts differ from led governance structure. target costs.
Partnering Handbook | 9
• Traditional approaches are of pitfalls that teams need to consultation with Other
challenged and new ways of understand: Government Departments, for
working are explored, driving example: HM Treasury, Business
innovation and ﬂexibility, reducing • Although the terms ‘’partnering’’ Enterprise and Regulator,
cost and improving performance. and ‘’Partnership’’ are frequently and the Office of Fair Trading
• Greater transparency and used interchangeably, partnering will result in key stakeholder
openness on business objectives should be distinguished concerns not being addressed,
has increased conﬁdence between from the legal concept of a leading to delays in project
the parties, allowing them to plan Partnership. Partnering does not approvals.
more effectively - knowing what constitute the creation of a legal • Business circumstances may
the impact of decisions will be on ‘Partnership’ as deﬁned in the change during the life of a
the project. Partnership Act of 1890, neither project which materially affect
• It strengthens the ability to does it involve the formation the decision to partner.
challenge those elements of the of a new joint business entity.
contract which do not add value to Partnerships carry a legally
enshrined joint responsibility for 2.3 When is partnering
the capability required.
debts incurred by the partners appropriate?
• Understanding and overlaying
in pursuit of the joint business Partnering must be evaluated
each parties’ respective
activity and care must be taken as an option for all new CAT A
governance and assurance
to ensure that legal Partnerships and B projects. It should also be
processes has reduced the time
are not inadvertently formed. considered for other projects where
taken for projects to commence.
• Competition Law prevails. the potential benefits of partnering
This reduces the cost of doing
Partnering is not a substitute for are judged to warrant the level of
business with MOD and reduces
competitive procurement and investment required. Partnering is
acquisition life cycle time.
teams need to be aware of this unlikely to be appropriate or provide
• Incentivised pricing arrangements benefit for requirements with a
and a joint pain share, gain share at all times and consult with DCL
value of less than £5 Million.
arrangements drive project staff as necessary.MOD teams
efﬁciencies and provide an should ensure that all regulatory
The decision whether to partner or
opportunity for increased returns demands are addressed. This
not is a complex one and will not be
for industry. will include compliance with the
decided on one point alone. A starting
Competition Act 1988.
point is to address a
• EC Procurement Regulations number of questions at project
Potential issues, risks and
must be complied with. initiation stage, some of which are
pitfalls of partnering
Partnering can present a number • There is a risk that insufficient detailed below. If the answer to any of
the questions is yes then partnering 2.4 Who to partner with procurement are more likely to
must be fully evaluated as part of the A key decision is who to involve in be potential partners.
procurement strategy. Initial advice the partnering agreement and how • Willingness and ability to partner.
and guidance on whether partnering to link them into the overarching The potential partners have to be
is appropriate must be sought from partnering contract. willing and able.
the Partnering Support Group.
• Information and data from
Partnering looks to involve members suppliers. What is to be provided,
• Are the requirements of the supply network and link them in what format and when.
susceptible to change because into the risk-sharing, incentive
they are evolving? • Proven track record on partnering
type projects. Where the supplier
• Is the approach incremental and
has worked successfully with
is technology insertion likely? Determining which suppliers
the MOD before or with other
• From previous experience is to include in the partnering
there potential for efficiencies arrangement requires joint
in the delivery of the equipment/ consideration of the following:
2.5 How to use partnering
• The value which each supplier With the increasing emphasis on
• Will the solution need to be longer term contracting and ever
provides. Those whose work is
developed during the duration a key component of the contract more complex procurements,
of the project? value are likely to be partnering we need to adapt our traditional
• Are there strong mutual candidates. procurement approaches to meet
dependencies where joint these demands.
• Criticality. Those who have a
management would be of beneﬁt? critical impact on the programme
• Are project risks particularly Section 3 of this Handbook
outturn are likely to be
difficult to predict/quantify candidates for partnering. mandates the steps that acquisition
and consequently is the best teams must take in order to prepare
• Dependency. If a supplier is in a for engaging with potential partners
approach for the parties to work sole source position for some or
together on risk identification, on a more informed basis.
all of the contract then they are
assessment and management? likely to be a potential partner. The guidance in this handbook
• Is there a sole source of supply • Scope for improvement. should be read in conjunction with
or is competition weak? Suppliers demonstrating a other policies and processes such
• Are there key restructuring or proactive approach to as the DE+S ‘Route to Service’■
rationalisation issues to improving performance with
be addressed? the aim of benefiting the
Partnering Handbook | 11
03 Part threeHow to partner
Effective Partnering requires a strong Successful Project Delivery
lead from the client and the Performance, Time, Cost
partnering client will deﬁne the scope of
demands partnering. Acquisition teams
early must be fully prepared as
“intelligent customers” before Joint Objectives
planning on, they engage with industry. Aims,Vision and
the evolving Joint Risk &
procurement This section provides a route Opportunity Mgt Key factors to be addressed
in detail to develop
map to develop, implement, and Joint risk registers partnering speciﬁc terms
strategy sustain partnering relationships.
Effective risk management
and the joint It should be read in conjunction Transparency of Information
What is required?
relationship with other related policies and By who?
Open Book requirements
processes such as the ‘Route
management to Service’ process deployed in Management & Issue Management Communication
plan. parts of DE+S. The key factors Governance
Responsibility & Authority,
Resolve at lowest level
Links to stakeholders
that need to be addressed are Management planning, Escalation procedure Partnering Updates
Relationship measurement Joint process
identiﬁed in Figure 1.
IPR Management Incentives/Protection of VFM Exit Strategy
Jointly agreed Shared Pain/Gain Detail agreed
Detailed partnering terms of
business and a library of existing
partnering contracts are being Effective leadership – demonstrating right behaviours
Culture - the right core values, attitudes and approaches
developed to provide more Skills and resources for partnering – the right people
speciﬁc information and support
for the commercial practitioner. Figure 1: Factors driving development of partnering terms of contract
Step 1: Project initiation – vision, aims and objectives
Step 1 is a Establishing a clear likely to cause problems partnering approach likely to
understanding of the business, on cost estimations/ enhance successful delivery
MoD activity sector or project is essential projections? and provide improved value
which is if the relationship is to be • Is there a well developed for money?
repeated aligned with overarching speciﬁcation for the • What drives MOD and
objectives. The establishment partnering requirement? Industry and do potential
with of individual and then shared
• What opportunities are there partners have experience
industry aims and objectives will help
for continuous improvement of working in a partnering
at point of to focus on project outcomes. environment? Figure 2
e g improvements on speed
For example, proposals for illustrates some potential
industry of change?
‘business transformation’ and drivers. What are the
engagement efﬁciency programmes should • What are the principles of
aspirations of each party?
be considered and agreed at the operating/how do we intend to
on vision outset, in terms of investment conduct business? • Who are the key
aims and stakeholders and are their
and projected returns. • What are the critical
views fully understood e g
objectives: success factors?
HM Treasury, DASA/DESA
Each of these questions should • What are the beneﬁts? Is a
be addressed to establish the Ofﬁce of Fair Trading, IAB.
MODs Business Model:
• Shared vision, aims and
• What are we here for? Successful Delivery/
VFM customer satisfaction Deliver anticipated profit
• What are we trying to
do and by when? Public Accountability Maintain market advantage
• Is there clarity over Effective workforce
Flexibility to compete Satisfy shareholders
the desired outcomes in future Incentivised performance
and objectives? Build industrial base
Robust industrial base Environment with
• Is there clarity on the right behaviours
• What are the key risks and
what are the consequences
if they occur? e g are
technological advances Figure 2: Examples of MOD and industry drivers
Partnering Handbook | 13
• Is there senior level support in It is important to recognise that the objectives is a key step in forming the
MOD for a partnering approach? partners may have mutually relationship along with collective
• Do prospective partners have an exclusive objectives. MOD will seek openness, trust and transparency.
appetite for partnering? successful and affordable project
delivery and require suppliers to Once agreed, the vision, aims and
• What are the opportunities for
drive down costs. Industry will seek objectives will be incorporated
collaborative core management
to maximise shareholder value, into the procurement strategy,
structure and co location?
market share and market advantage. relationship management plan and
• What is the approach for Recognition of these different overall team strategy/plans.
dissolving the contract should
circumstances make it necessary?
Step 2: Producing partnering speciﬁc terms of business
The following advice relates to the working to reduce relationship risks, • A ‘senior responsible owner’ for
preparation of partnering terms of and demonstrating that best practice partnering who is a senior member
business and each aspect shall be is being implemented. of the customer organisation for
considered for all partnering contracts. the product or service.
Partnering requires the • A clear management structure
Some of these partnering speciﬁc establishment of an effective including the appropriate board
terms of business relate to management structure, supported structure, and the terms of
commercial aspects that have by a two way governance framework. reference for each board.
presented MOD and industry with Within the relationship the teams
• A shared ‘service level
implementation difﬁculty in the delivering the business will be made
agreement’ with the end
past. These areas will require far up of both MOD and industry people,
customer for the product or
greater clarity, rigour, consistency on a best-for- project fully integrated
and certainty in interpretation and basis, avoiding “man-marking”.
• Clearly deﬁned roles and
application in the future.
In addition to the joint project board, responsibilities, enshrined in a
the business, sector or project should set of structured delegations.
The following sections consider the
key factors and provide information establish an independent ‘client’ • An agreed code of conduct
on building up a solid commercial board within MOD, whose role is to governing behaviours of the
base for subsequest detailed ensure that MOD’s requirements parties, with appropriate “steps
negotiations/contract preparation. and objectives are met and value for to take” for anyone who is non
money is protected. compliant.
3.2.1 Governance • Agreement on which tools
The purpose of governance in In establishing management and and processes are to be used
partnering is to ensure that the governance arrangements you should to discharge the day-to-day
appropriate controls are in place, ensure that there is: business of the contract.
• Agreement on the governance Acquisition teams should recognise • The need for continuous
structure and of the exact that generally achieving quality and assessment and demonstration
processes to be used. timeliness is an effective way of of VFM irrespective of whether it
• Clarity about how the governance ensuring cost effectiveness. is competitive or non competitive
and assurance structures and environment.
processes will operate and that they VFM analysis demands an objective • Rights to post cost major
are aligned. consideration of available options contracts (where appropriate).
• Agreement on key performance with the aim being to reduce as far as • Require primes to maximise
indicators that relate to shared aims is practicable the level of uncertainty effective competition throughout
and objectives, including business in meeting the requirement. the supply network.
transformation agreements. • Apply NAPNOC (No Acceptable
Key factors driving best Value For Price NO Contract) team pricing
• An agreed performance review
mechanism in place which Money include; approach to any non competitive
supports a robust audit process. elements of the contract.
• An agreed mechanism for • Clarity on the requirement/ • Agree and audit overheads and
assessing the impact of any capability required (generally proﬁt based on existing costs and
potential change of scope. output based). revenue change prior to entering
• Create and sustain a robust the contract.
3.2.2 Achieving Value for Money whole life ‘should cost’ model • Assess the MoD and Industry
Value for Money is the optimum mix of and best value baseline. track record with relation to
quality, time and cost considerations • Agreement on optimal risk achievement of VFM in the
which meet the stated requirement. allocation whereby risk is taken particular sector/marketplace.
VFM analysis demands an objective on by the party best placed to
consideration of options available to manage it. 3.2.3 Incentives
achieve the desired outcome. • Clearly define and evaluate the Contracts and relationships
potential trade offs to realise between MOD and industry should
Value for Money for the taxpayer is at best VFM. be incentive based to improve
the heart of all Defence Acquisition and capability delivery and ensure delivery
• The need for a clear and robust
in all procurement activity value for within performance, time and cost
audit trail with relation to VFM parameters. Incentives need to be
money must be continuously assessed
decisions and the agreement of seen in the light of common objectives
and demonstrated. Partnering
VFM stakeholders in the decision to which both MOD and its’ suppliers
contracts are no different and have
the same requirements as any other making process e g Treasury, subscribe. Principally these are:
mechanism in Value for Money terms. DASA/DESA.
• Agree incentives to reward • To support the operational
One expression of Value for Money is; improved efﬁciency, ‘better than capability deployed by the
“the optimum mix of time cost and usual’ performance, innovative Commanders-in-Chief in the ﬁeld,
effectiveness” solutions and cost reduction. at the front line of defence.
Partnering Handbook | 15
• To improve standards of service structured, TCIF pricing offers a “Open Book” for which MoD already
delivery, maintain and improve powerful incentive to continuous has a set of policy principles.
reliability and performance. improvement and cost reduction in
• To drive down the through life long term relationships, with the It is emphasised that this guidance
cost of ownership, from initial beneﬁts shared by both parties. relates to relevant data. An insistence
acquisition to disposal. on providing unnecessary data can
The pricing mechanisms should lead to additional cost, distraction and
• To establish equitable sharing be supplemented by performance frustration - hence the importance at
arrangements of risk and reward based incentives e g Earned Value the start of the arrangement of agreeing
and mutual beneﬁt from gain Management and Gainshare that the information that is required, how it
sharing opportunities that arise. drive continuous improvement. will be exchanged, recorded and used.
• To maintain or enhance industrial
competitiveness in home and Incentives should also include the Key questions:
overseas markets. opportunity for suppliers to gain
greater returns if they are • What is the purpose of the
• To establish a fair balance between
consistently successful against information request and how will
value for money for the taxpayer
agreed delivery metrics. the information be used?
and reasonable returns to industry.
• Who requires the information?
3.2.4 Transparency of information
In certain sectors of the defence industry, Openness and trust underpin • How often will the information
these factors will mean MOD and industry successful partnering. Key to this is need to be accessed / gathered?
engaging to develop longer term the provision of information from all • What are the agreements and
commercial relationships, often in parties in the format and timescales understandings with relation to
the form of long-term partnering. agreed. The requirements for access open book?
The prospect of these longer term to information should be speciﬁed in • What kind of information should
commercial relationships should be the commercial arrangements between we expect?
a major spur to good performance, the partners and should not necessarily
• Financial accounts
if supported by appropriate incentive be conﬁned to non-competitive
arrangements. One of the most critical contracts. It is important that the • Management accounting
of these will be the selection of the agreement is properly documented information
most appropriate and effective pricing and where such required information • Accounting systems and
mechanism e g Firm, Fixed or Target is not provided as agreed,early action records
Cost Incentive Fee. is taken to resolve the issue. • Procurement policies and
In the light of the movement towards The transparency area will form
• Technical information
high value, long term partnering, an important element of the
MOD pricing policy is expected to standardised terms of business work • Performance information
develop in the direction of the far and further guidance on this will be relating to previous projects
greater use of Target Cost Incentive provided in due course. The further • Time sheets and other
Fee type arrangements. Properly guidance will include information on source data
• Business information Of course, transparency works both 3.2.5 Intellectual Property Rights (IPR)
• Order intake details and ways, so MOD will need to agree with The MOD has an agreed overall strategy
resource profiles its partners what information it is for dealing with IPR [AD4], approved
obliged to provide, the format, how at Ministerial level and industry are
• The control regime
often and what the information will aware of the principles. This should
• The company’s governance be used for. Care should be taken to be applied to partnering contracts.
structure provide only that information required
• Information required for to undertake the contract or project. At the outset of partnering an
audit purposes Project teams are required to: objective assessment must be
carried out regarding the approach
• Have a joint disclosure agreement to IPR and user rights. Partnering
One simple means of testing in place and a common provides an opportunity to engage with
whether information access/ interpretation of reciprocal industrial partners (including their
provision under the umbrella of
transparency. The disclosure key suppliers) on IPR matters early
transparency is adding value to
agreement should also include in the life of projects, recognising the
the business that covers the points
information regarding the MoD and its partners have differing
above and can be applied by both
company’s governance structure and often conﬂicting interests on this
partners is to use the TAURUS test:
and details of personnel and topic. MoD’s primarily interest is in
procurement processes. securing adequate rights of access
Timely - Does the information reach
the recipient in time for requisite • Operate an ‘open book’ and use in industry’s IPR to meet its
decisions to be made? approach to verify cost and future business needs in return for
obtain continuing access to the contract funding it provides. IPR
Accurate – Is the information be- cost, schedule and performance owners within industry have an interest
lieved to be accurate, or accurate at information. in protecting their IPR from access
the point of delivery? • Use the companies existing and use by others unless with the
management information system. owner’s express consent.
Understandable – Does it make sense? Where this does not provide the
ﬁdelity of information required The advantages of partnering can
Relevant – Is it consistent with the then additional requirements best be realised by addressing the
understood use? Do you as the re- should be agreed in advance. following points before the main
questor really need the information? procurement decision point is
• Agree a deﬁnition of
reached on the project concerned:
Up to Date – Is it recent enough to
• Independently audit any of the • Agree a long-term IPR strategy
still be of use?
agreement information. for the project concerned,
Serviceable – is the information pro- • Ensure that the partner(s) ﬂow including an understanding of
vided in a format that can be easily the above, where appropriate, into the respective positions of MoD
used by the recipient? the supply network. and its industrial partner and
Partnering Handbook | 17
associated key suppliers, including to use (and have used) the rights to partnering approach it is essential
user rights to be granted. maintain capability and compete future to identify the actual level of risk
• Establish plans for the work. This policy is followed because involved, our respective appetites
exploitation for of the IPR to be the contractor is generally best placed for risk and allocate risk to those
generated under the contract to exploit the IPR it creates under best placed to manage it and exploit
concerned, whether without or such contracts, especially whether opportunities where they arise.
outside the project. that IPR builds upon its pre-existing Acquisition teams should:
(background) IPR. In more limited
• Agree the IPR ownership
circumstances, MOD may wish to take • Ascertain upfront the overall
position particularly in instances
ownership of the rights itself, level of risk, the appetite to
where suppliers may wish to
use background IPR in their manage risk, and the basis for
Partnering is less likely to provide apportionment – which risks are
proposed solutions. IPR beneﬁts once the main contract managed by individual partners
• Identify (as far as possible) is placed. However beneﬁts might and which are to be shared.
planned information and data arise in situation where for example
delivery requirements under the • Agree shared aims and objectives
third party rights are identiﬁed
contract, recognising that further (what drives industry), to maximise
during the course of the project
clariﬁcation may be required the possibility of opportunity
contract that could interfere with
during the course of the contract. realisation.
contract performance or delivery.
• Establish rights to share revenue Partnering principles can be • Negotiate a joint ‘pain and gain’
used here to establish a mutually mechanism for shared risks (not
arising from the contractor’s
acceptable way forward. proﬁt adjustment).
exploitation of any IPR generated • Agree pricing for risk and funding
during the contract. In all circumstances it is essential to mechanism – including incentives
gain expert advice from our internal for realising opportunities.
• Put in place arrangements to
IPR subject matter experts – including Consider whether risk funding
safeguard suppliers’ interest in
when you are developing and agreeing should be kept outside of the
the project speciﬁc IPR strategy. Where pricing arrangement, to be
• Agree the arrangements for the appropriate they will seek legal opinion jointly managed or to be
management of IPR. from our internal MOD legal team. managed by MOD if those risks
• Agree on an exit strategy and will fall to us. The overarching
how IPR will be handled under 3.2.6 Risk and financial approval must always
that strategy. opportunity management be in the forefront of thinking.
A key characteristic of partnering is • Actively manage risks to create
On the subject of IPR ownership, MOD joint management of risk, including opportunities for improved
will generally follow its normal IPR the creation of mechanisms which business outcomes.
policy of placing ownership of rights incentivise the proactive prevention • Cooperate with primes to ensure
arising from contract work with the of risk and the active exploitation coherent treatment of risk
contractor, but securing a free licence of opportunities. In considering a throughout the supply network.
• Assess with industry partners It is important that Issues should 3.2.8 Exit strategy
whether we jointly have the not be left to fester and strict In any legal arrangement we must
required skills and competences time limits need to be applied to recognise that there is no such thing
to effectively manage risk and resolution procedures. as a ‘partner for life’. Requirements
realise opportunities. may change or be cancelled for
• Seek to achieve commonality with The existence of a pre-agreed operational reasons, or partners
industry partners in the use of risk joint MOD and industry procedure may fail to perform. Major Projects
tools, techniques and practices. demonstrates trust and confidence are obviously not “ﬂip in ﬂip out”
• Consider seeking a contingency and provides a practical method of type contracts however it is prudent,
fund for high impact low resolving difficult issues quickly. from the outset, to consider what
probability risks that are outside provisions need to be put in place
the contract. The contingency The key considerations: if exit is a consideration. In forming
must be within the overall an exit strategy, the partners should
ﬁnancial approaval. • Define the criteria for what agree the criteria that would trigger
constitutes an issue. an exit and in particular establish.
• Develop supplier data and down
selection criteria to evaluate the • Agree an issues resolution
procedure for both pre and post • An understanding on “reasons for
performance of suppliers, who
contract periods. exit” e g operational reasons or
successfully identify, mitigate and
• Agree where specific failure to perform.
responsibilities and delegated • A clear and agreed articulated
authority lies within the issues mechanism for triggering exit
3.2.7 Issue Resolution resolution process from the contract. The strategy
Like any relationship, partnering needs to be creditable and realistic
• Put strict time limits on the
will throw up difficult issues. The and should be assured as part of
resolution of issues.
terms must set out how these the assurance and governance
“issues” will be identified and • Aim to resolve issues at the
process.The exit strategy also
managed through to resolution. lowest level, but be willing to
has to be ﬁnanced from approved
escalate to senior levels in the
The essential point here is that you event of stalemate.
• Where appropriate, a clear
should aim to resolve problems and • Keep senior staff informed.
compensation agreement in the
issues informally and at working
event of “exit” with associated
level without automatic recourse to If the issues resolution procedure ﬁnancing.
formal action (ie: Dispute Resolution is unsuccessful then it may be
Procedure). However, there will be necessary to activate formal • Transparency of information
occasions both pre and post contract contractual remedies such as regarding any factors that might
where agreement cannot be reached Dispute Resolution. Detailed endanger the contract.
and this is why an issues resolution advice and guidance on Dispute • Ownership rights regarding any
procedure is needed to ensure a clear Resolution is available from MOD tangible assets, or materials
route for escalation. DDefCP area. purchased under the contract.
Partnering Handbook | 19
• Rights to use/exploit any managing the expectations and Suggested tools and approaches to
information needed for the perceptions of stakeholders. aid communication:
ongoing delivery of the product
or service. Essential to this will be ensuring • Simple organisational structures
• Arrangements to ensure that that partners communicate a and clear points of contact.
Crown Servants retain adequate unified message, both to their own • Stakeholder maps/analysis and
knowledge/skills/competence staff and their wider organisations, authority levels.
to maintain delivery of the utilising shared data environments, • Regular and timely dialogue at
product or service in the event of co-location etc wherever possible. all levels.
exercising the exit strategy. Many of these undertakings will
• IT, document standards and
• How to ensure ongoing security form part of the contract terms
shared data environment.
of supply, or operational – especially obligations for senior
management to meet at regular • Annual ‘whole team’ seminars
sovereignty, and the right to and road shows or events, jointly
nominate certain elements of the intervals and agreements on a
fronted by industry and MOD senior
supply chain. common communication process
for instance. In support of this, a
• How to retain the services of key • Joint induction programmes.
communications plan should detail
elements of the supply chain in the
further how communication will be • Joint newsletters, PR material
event of exercising the exit strategy.
maintained consistently throughout and websites – for internal and
the project life so that all people external use.
3.2.9 Communication are aware of progress and success
Effective and continuing and are able to contribute to ideas The RMP should detail the key
communication will play a key role for continuous improvement, and stakeholders right through the supply
in helping to develop partnering that it is partnering which is making network and how they will be involved
behaviours and culture, and in the difference. and affected by a partnering approach.
Step 3: Relationship management
Best practice relationship performance and delivering Establishing and sustaining the right
management is an important better value for money. However, culture and associated behaviours from
part of many successful business with increasing technological the outset has been identiﬁed by NAO
enterprises and it is a key factor complexity, globalisation, industrial and others as a critical part of overall
in making partnering contracts consolidation and the continued project success.
work. emphasis on through life solutions,
relationships between MOD and This section sets out the MOD approach
The relationship between MOD industry will in the future need to to relationship management in
and industry will remain rooted be even closer and more open to acquisition projects including those
in continuously improving project achieve the required outcomes. following a partnering approach.
The section looks at the key principles 3.3.1 Establish the fundamental • Acting in a confrontational way.
of relationship management. principles of the relationship • Taking challenge as a personal
Behaviour describes the way in which criticism.
Complementary guidance is contained people act and interact with others. • Using knowledge or information
in the Commercial Policy Group The Defence Values for Acquisition as a power lever over others.
Guideline No 9, Building and Sustaining (DVfA) (AD2) place great emphasis
• Automatically resorting to formal
Effective Relationships [AD5]. on using the right behaviours (link
to the DVfA Toolkit: http://defence
MOD is not alone in placing emphasis intranet.diiweb.r.mil.uk/NR/
on the importance of relationships rdonlyres/08E37503-D0E8-4C0A- You must detail the behaviours
and cultural/behavioural aspects of B05A-FE5B98C292ED/0/Defence expected of team members in your
contracting. Industry initiatives include ValuesforAcquisitiontoolkitv20.ppt). RMP and all team members should
the SBAC SC21 (Supply chains for the The following behavioural traits work in accordance with the DVfA.
21st century) which aims to improve drawn from the DVfA, are helpful
relationships and effectiveness within to gain an understanding of what is Culture Describes the accepted
supply networks. essential in developing an effective collective behaviour within a group
business relationship: or organisation “the norm”. Effective
The readiness of the team and organisations require a common
the individuals within to partner Positive set of cultural values that act as
is a critical point and the right • Effective listening and taking the ‘corporate glue’, driving team
preparation is essential. In simple notice of the opinions of others. members towards the aims and
objectives through commonly accepted
terms all project team members • Considering the impact of your
understandings, practices and
must understand the strategy action on others.
methods. Where these values are not
for relationship building and be • Being approachable. fully embedded, teams are likely to
educated and trained on the subject.
• Thinking and doing “best for suffer from inconsistent approaches
This change in approach should
project”. and attitudes in the treatment of
not be underestimated and teams
• Accepting constructive challenge business matters. Leadership plays
should consult with groups such as a key role in developing the culture
the Partnering Support Group for in the way it was meant.
of organisations, and in a partnering
advice and support. • Doing what you say you will do.
context leaders will need continually
• Working ﬂexibly. to display the positive behaviours and
What needs to be done? values upon which the relationship
The following sections describe depends, and actively encourage and
the process for developing the support them in others.
relationship management plan. • Being dismissive of others and
Detailed guidance and support on “carrying on regardless”.
The following questions need to be
the subject can be obtained from the • Talking down to people. considered as the basis of the initial
Partnering Support Group. • Distrusting as a default. RMP. This is a key document for any
Partnering Handbook | 21
project team adopting a partnering smart acquisition, however there is • How will the team become
approach and information on what now more emphasis on the MOD/ integrated and how/when will
needs to be included in the RMP and industry business relationship they engage with industry?
is contained in Commercial Policy and how teams will partner. • How will the team measure
Guideline No 9 (AD5). Workshops consider key objectives each individuals ability to
and challenges for the team and partner? (Personal objectives
• Will we both need to be ﬂexible and enable the team to establish how relating to partnering behaviours
responsive to change? the relationship will be built and can form part of the formal
• How will innovation be sustained moving forward. performance agreement of all
• How is an open and transparent Some of the areas that need to be
• What happens to individuals
relationship to be established and covered in the initial workshop are:
(including senior members) who
what information/data is required, display non partnering behaviour
for what purpose and when? • How much do individual team
on a regular basis?
members know about building
• How are risks and opportunities • When will the initial strategies
effective relationships and how
jointly identiﬁed and managed? be produced e g project initiation
will the team be educated on
• How important is the need to the subject? documentation and procurement
work effectively together and what strategies?
do we need to focus on (sustained • What are the key requirements of
improvements, cost reduction, the business relationship – core
values, ways of working, vision The product of the initial workshop
and objectives? includes:
• Where does the importance
of being able to work together • Do all team members including
rank against cost, time and seniors understand partnering • Key objectives including
performance considerations? and relationship principles and relationship objectives and the
are they fully bought into the levels required. Agreement on
• Who is responsible for managing the
concept and approach? core values and ways of working.
relationship aspects of the project?
• What is expected of Team Leaders • Key issues that the team face
• What are the ethics that will shape
the relationship? e g will team leaders lead by eg the team is not educated on
example and how will their relationship/partnering issues
performance in the relationship and need support.
3.3.2 Initial relationship
area be measured? • Identification of skills gaps and
• What organisational and cultural proposals for education and
Relationship workshops need to be
held in the early stages of project influences are there and what training events.
initiation. Relationship workshops are are the likely differences • Key risks, including barriers
similar to the “breakthrough” type between MOD and industry and blockers to an effective
sessions that were prevalent under cultures and approach? relationship.
• Identiﬁcation of a responsible address the differences. Further teams need to establish jointly how
ofﬁcer for relationship detailed advice on issues to measure relationship management will be
management aspects of the and a suggested model on how to taken forward. The steps outlined
project. conduct measurement above need to be repeated with
is contained in Appendix B. industry to develop what now becomes
3.3.3 Develop the relationship a joint RMP. In addition the partners
management plan The process of assessment is, in need to share their experiences on the
Once the initial workshop has been itself, a key contributor to building subject of relationship management
conﬁdence in the relationship. There and partnering.
completed the team needs to develop
the RMP. Detailed guidance on this is may be instances where non advocate
assessments may help if there are The outcome of the joint work will be
contained within CPG Guideline No.
issues that are proving difﬁcult for a joint RMP which will include:
9 (AD5). The plan needs to include
timetable for implementation. the partners to resolve.
• Agreed joint vision aims and
Experience has shown that if a These are the some of the key points objectives.
team is new to partnering, gaining to consider: • Agreed base partnering speciﬁc
an understanding of new ways of terms of business.
working, the behaviours and cultures • What is the strategy for
• Agreed principles on building
required can take time. Typically a relationship measurement? What
and sustaining an effective
working level understanding can take is measured, who measures and
up to 3 months and this should be over what timeframe?
factored into the planning cycle. • What is the process for
assessment - interviews, written
3.3.6 Skills and training
Traditionally, MOD skills
3.3.4 Agree on the principles of responses or other means?
requirements were determined by
relationship measurement • What tools will be deployed, a procurement approach that was
In any project there will be objectives, for example, maturity models, often transactional by nature and
targets and key performance propensity to partner, critical where individual skills development
indicators measuring performance, success factors or dash board? was strongly biased towards
cost and time. It should become • Ensure that Governance and functional competence. In the past,
the norm that we also measure the action management is well commercial relationships tended
effectiveness of the relationship. deﬁned to enable progression of to be arms length and sometimes
key issues. became adversarial when there
Relationship assessment and were difﬁcult commercial issues to
• How will inappropriate behaviour
management is key to enabling the resolve. With increasing pace and
be dealt with?
partners to compare performance complexity in acquisition, the skills
objectively on how the relationship is 3.3.5 Engagement with industry and behaviours we require now place
progressing, understand any differences When potential industry partners even greater emphasis on the ability
they may have and decide how to have been identiﬁed, MOD and industry to operate effectively in a partnering
Partnering Handbook | 23
environment. This means that in continuous change and sustain establishing mutually satisfactory
addition to functional knowledge, constructive relationships. relationships [AD6] is central to
we expect our people, and those in this policy. This is a huge challenge
industry, to be able to communicate On the latter, the Commercial Policy and MOD is introducing a number
and inﬂuence business outcomes, Group Guideline No 5, Codes of of initiatives to up skill acquisition
to be ﬂexible and responsive to Practice governing principles for teams and to improve learning and
development. These will include
opportunities to exploit joint
training and other education events
to develop commercial and business
Effective partnering relationships
rely heavily on the individuals
involved having the requisite
skills, competences and training.
Appendix C describes the current
suite of partnering training
available to MOD teams. This is
under review to bring in further
new courses to reflect latest
partnering thinking and practice.
Step 4: Compliance
Appendix A contains a compliance
schedule, listing those things that
teams must do to be ready to make
a commitment to partnering. This
schedule will be integrated into
the cross Department approval,
commercial assurance and due
diligence processes. Failure to
comply is likely to delay the approval
and contract award process. ■
a Appendix a
What my team needs to do
Initiation • Does the project fall within the mandated policy criteria for a partnering MANDATORY
contract to be considered?
Consideration • Is a partnering contract aligned with MOD’s industrial and competition
of partnering policy? A full evaluation
in the • Is there clear endorsement to a partnering contract from senior decision of these
procurement makers in MOD? requirements
strategy in the
• Has an initial relationship workshop taken place? procurement
• Is there clarity about the desired outcome, and how to deﬁne the objectives, strategy is
Initial key milestones and targets in order to achieve it? mandatory.
considerations • Is it clear what kind of relationship this business needs with its industry
partners and is partnering appropriate?
• Is it clear what resources are needed (people and money) to make a
partnering contract work, through life?
• What do we know about the track record of prospective industry partners
• How does a partnering contract offer best value for money?
Pre-contract • Conﬁrm the proposals for risk allocation are equitable and that the joint MANDATORY
approval stage risk management mechanisms are clearly understood and agreed. Produce a RMP
• Is there agreement on the joint governance arrangements to be Incorporate
Partnering is implemented? partnering speciﬁc
selected as the • Is there an agreed exit strategy and can the requirement be re-competed terms of business
into the contract.
preferred option effectively if necessary? Undertake
MoD / Industry
Key • Is there an agreed process for escalating and resolving issues/disputes? relationship
considerations • Are there agreed metrics to measure contract performance and the workshops and put
before the health of the relationship? in place a formal
contract is • Is the RMP ready to operate? /benchmarking
placed • Have the high level principles for the relationship been agreed? mechanism for the
Partnering Handbook | 25
Pre-contract • Is it clear what information and data will be shared, the mechanisms for MANDATORY
approval stage sharing it, and the people responsible for authorising disclosure (an open Produce a RMP
book environment)? Incorporate
Partnering is • Is the MoD/Industry team ready to partner and have they prepared correctly? partnering
selected as (eg have breakthrough workshops, skills assessment, training etc) been speciﬁc terms
the preferred carried out? of business into
option the contract.
• Does the team have the leadership, skills, values and attitude required to
establish and sustain an effective partnering arrangement? Undertake
considerations • Are customers, key stakeholders and teams in MOD and industry fully briefed
before the on the partnering contract and their respective obligations?
contract is • Have the partnering speciﬁc terms of business been incorporated into the and put in
placed contract? place a formal
Post contract • Conﬁrm the process/arrangements for joint risk sharing and management post MANDATORY
actions contract award.
• Put in place a programme to include relationship workshops/events, focussing on Review the
Implement the awareness and understanding of relationship issues. relationship
the RMP and • Implement the joint relationship management and governance framework/ regularly
partnering good structure. through
practice life using
• Operate the disclosure/transparency strategy.
• Implement and measure progress against the agreed partnering terms of business, mechanism
aims and objectives? and criteria,
• Individuals have personal performance objectives relating to the partnering and obtain
relationship and behaviours. independent
• Agreed procedure working effectively for issue resolution. veriﬁcation.
• Use communications to let team members (and external stakeholders) know how
and when partnering is making a difference – celebrate the successes.
• Ensure there is clarity over the actions and obligations of both partners, and that
these are managed.
Note: These aspects will form part of the through-life commercial assurance process.
b Appendix b
Suggested model for relationship measurement
B1 - Context
Base-lining involves a review”, is easy to understand • Facilitate and encourage
qualitative and quantitative and deploy and is therefore dialogue.
assessment of the relationship applicable to all stages of
and should conﬁrm joint • Highlight risks and consider
relationship development risk reduction activities
understandings of how the and throughout the project
relationship is at that point, how lifecycle. • Create (inﬂuence)
it is to be managed and key The beneﬁts of holding an RMR expectations.
issues between the parties. include the following: • Build personal relationships
The Relationship Management • Develop an improved stakeholders.
Review (RMR) process provides understanding of the
a mechanism to evaluate customer/supplier
relationships against a Code It should be noted that
of Practice (CoP). It could be a holding a RMR will not in-
tailored CoP, or a generic version • Reveal opportunities for itself fix a poorly performing
e g SCRIA or similar. improvement. relationship, only completing
• Identify issues/problems that the improvement actions will
The RMR process, based on if resolved will help improve deliver sustainable business
the principle of “plan, do, supply chain performance. benefits.
B2 - Factors to consider before conducting a RMR
The scope and scale of involved, the extent of the The following critical success
activities undertaken to stakeholder population to be factors should be considered:
assess and improve supply engaged and the objectives of
chain relationships will be the exercise. A decision matrix • Senior sponsorship –
determined by factors such as can be constructed and used to management from both parties
the maturity and complexity measure risk and complexity must have the responsibility
of the relationship, the risk and to indicate the level of and authority to dedicate
incurred by the parties facilitation required for the RMR. resources and resolve issues.
Partnering Handbook | 27
• Commitment – both parties must visible and agreed by both • Resources – both parties will need
demonstrate a commitment to parties. to make the necessary resources
improve the relationship. • Ownership – parties must take available to complete the agreed
• Process and approach – the shared responsibility for the improvement and action plan.
process to be used must be resolution of issues.
B3 - RMR Process
The process suggested here to deﬁne speciﬁc sites and locations Understand and agree criteria
provides a structure for assessing, to which the review relates. It is A RMR typically takes the form of
improving and reviewing the vitally important that the deﬁnition is a perception appraisal, in terms
relationship between two parties, relevant to the work to be undertaken of face-to-face discussions, a
involving multiple stakeholders in and that any improvement activity can questionnaire or facilitated workshop.
both organisations who interact on be implemented by the participants of A data gathering tool should support
a regular basis. the review. In most cases, it is better this review. It is important to reach
to take a bottom-up approach rather agreement on the approach to be
The RMR process can be broken than top-down. deployed and with whom. Often,
down into four stages: planning, facilitators (internal or external) are
assessment, workshop and Points to consider include: employed and arrangements have to
improvement plan. • The level of engagement needs be made to allow them to complete
to be appropriate for the type of their work, particularly when working
B-3.1 Planning business being undertaken. across different locations.
• The review should be balanced
At the outset, it is important to deﬁne Information can be captured in
and include all stakeholders.
the level at which the relationship is 3 ways: interview, workshop and
required to be managed. This may • At least one participant from questionnaire. All have advantages
be at company, business unit, project each organisation must have and disadvantages. Consequently,
or team level. For large, complex responsibility and authority to when developing a RMR, thought
organisations, it may also be necessary deliver the desired actions. should be given to the most
appropriate techniques to enable the etc), each with a number of Points to consider include:
process. characteristics (usually 5- see
Points to consider include: the example RMM at the end • Establishing a consensus can
of this section). These are then be difﬁcult, but differences in
• Agree the process, tools and consolidated by the facilitator to perception will provide material
techniques to be used. develop organisation-wide views for debate.
• Agree the timetable. of the relationship. Maintaining • Encourage reinforcement of poor
confidentiality of individual’s perceptions with comments.
• Deploy stakeholder brieﬁngs and
training where necessary. inputs is critical to the success of
• Focus on the relationship state
and its’ characteristics rather than
B-3.2 Assessment Points to consider include:
attempting to improve against
Understand supplier and customer any sort of marking/scoring
• Data capture activities should
run concurrently – minimising
This phase relates to the assessment
the risk of cross-contamination Gap analysis
of the relationship and usually
comprises two elements; data of results. Undertaking a gap analysis of the
gathering and consolidation. • Challenge rogue results (ie very two sets of results will highlight
low or very high). the major differences in perception
Data gathering using a Relationship • Scoring mechanism should of the relationship. The objective is
Measurement Matrix (RMM) not be used to compare one to understand the key issues that
is the means of capturing customer-supplier relationship are impacting performance of the
the views and perceptions of with another. business. Equally, there may be some
individuals within the supplier trends or key themes that are worthy
and customer organisations. of discussion at the workshop.
All participating stakeholders
complete a questionnaire The two sets of data collected in Points to consider include:
(issued by and returned to the the previous activity are compared
facilitator), assessing areas of a to identify where the two groups • The gap analysis chart plots the
relationship (communications, agree that the relationship is the average from all participants
capability management, continuous same and key differences that which can obscure individual low
improvement and commercial, impact performance. perceptions.
Partnering Handbook | 29
• Relationship improvement goals an objective comparison between both parties. The relationship
should be jointly agreed by the key the partners. Achieving consensus characteristics table (see below)
stakeholders of both parties. is particularly important, as this summarises the attributes of each
• Consistency of participants is demonstrates agreement on a type of relationship. Participants
important for reviewing progress. baseline or starting position for the should agree which relationship
relationship, prior to identifying style is appropriate for the business
B-3.3 Workshop any joint improvement activity. As being transacted between the
Discuss & capture issues relationship management is a two parties and their future strategic
This activity should be conducted way process, both parties need to objectives and engagement plans.
jointly. Where there are known agree and understand the other’s
to be difﬁcult issues to address, position. Points to consider include:
the facilitator will ensure that the
discussions are kept on track and Points to consider include: • Think about interim targets.
personal agendas do not over-ride • Use the relationship
the purpose of the session. Similarly, • Failure to achieve consensus characteristics table to identify
the facilitator manage the process typically results in a failure to the type of relationship required.
to deliver the desired outcome, and achieve the desired outcome.
• Participants must agree and own
prevent the discussion from becoming • This step is not easy, don’t rush it. the “to-be” target
too deeply drawn into discussion over • Use consensus as baseline proﬁle
particular issues. for future reviews.
B-3.4 Improvement plan
The results of the assessment Produce and update action plan
should drive the agenda, with the key Agree the “to-be” target The action plan should contain the
discussion points identiﬁed during the Having gained an understanding of key actions agreed to meet the
data gathering and analysis. the as-is, equally important is the “to-be” target. Typically, these
process of establishing a target to will be set against the key themes
Agree consensus position be achieved during the forthcoming / issues discussed in the workshop.
In comparing the two perceptions, period. It is important that joint The plan should also include a date
it should be possible to agree agreement is reached because for the next review, typically within
consensus on the “as-is” position. any planned activity needs to be 6-12 months. Actions should focus
The use of an assessment tool jointly implemented, particularly on overcoming the perception gaps
helps considerably as it provides as activity will be required by and addressing those issues that
are perceived to be holding the Report outcomes included as part of the regular
relationship back. As a minimum, all participants in quarterly business review between the
the RMR should be given a copy of parties.
Equally, there may be issues that the the ﬁnal results and agreed action
key stakeholders are keen to promote plan. Senior sponsors in both As part of a closed-loop process, one
in the relationship and actions organisations should be briefed as of the objectives of this review is to
should support those. Completion to the effectiveness of the process, understand any issues or
of improvement actions within the its outputs and recommendations for opportunities as a consequence of
RMR cycle time may be challenging, future events actions taken following the previous
therefore it is advised to focus Points to consider include: RMR cycle (ie method chosen, level of
attention on 5 or 6 key actions based participation and deployment of the
on the outcome of the analysis and • Involvement does not stop at the review). This should then be taken
workshop that will help to achieve the end of the workshop event. forward into the planning activity for
desired relationship. the next review cycle.
• Senior sponsors will want to see a
return on their investment.
Points to consider include: Points to consider include:
• Advertise success.
• Think about outcomes, not • Was the process deployed
problems. Where are we now? (Review) effectively (ie were the right
• Remember - achieving small After an agreed period, established participants included)?
improvements is preferable to not within the action plan, the key • Have actions been completed and
achieving “blue sky” targets. stakeholders in the relationship improvements embedded?
• The improvement action need not should meet to review progress • Is it appropriate to review progress
be with the party that identiﬁed the against the plan. This may be and repeat the process?
Partnering Handbook | 31
B4 - Relationship Management Matrix (RMM)
As part of a structured relationship desired relationship. It provides organisations who interact on a
management review process a RMM a mechanism to evaluate the regular basis.
(such as below) allows teams to relationship between two or more
assess their relationship against parties, typically a customer This matrix focuses on key
the chosen Code of Practice and – supplier relationship, involving elements of the relationship, each
deﬁne and characterise their multiple stakeholders in both with a number of key attributes. ■
0. Failing 1. Reactive 2. Performing 3. Co-operative 4. Collaborative
1. No/Limited meetings One way (transactional) Regular meetings & Frequent communication. Join strategic governance
Communication or communications Communication. No agreed communication structure Points of contact are focused on communication,
Planning structure with no points of contact. Meetings with clear and consistent known and mapped. relationship and performance
deﬁned points of contact focus on addressing points of contact, Contact Meetings focus on both planning. stake holder maps
problems/issues maps documented short-term actions & deﬁne roles & responsibilities
long term planning
2. Information Secrecy prevails. No Information provision is Information provision is High quality information High quality information is
Exchange sharing of information. limited to contractual limited to contractual (clear, accurate & timely) freely available in a shared,
Reliant on formal, obligations, clariﬁcation may obligations, clariﬁcation is provided in advance of open, environment
written comms still be required may still be required requirements.
3. Problem Blame culture prevails, Fireﬁghting culture, focused Identiﬁes problems Proactively suggests Joint activity to pre-empt
Solving no acknowledgement of on resolution rather than early and communicates solutions to emergent and mitigate any problems/
problems prevention recovery plans in advance. and potential problems. issues.
4. No/ poor response to Responses to enquiries Responses to enquiries are Responds to predicted Responses provide
Responsiveness enquiries and requests are reactive and often lack timely and compliant requirements suggestions for
5. Behaviour Little/no behavioural Recognition of different Behaviours demonstrate Behavioural standards Joint behavioural charter
standards exist behavioural standards appreciation of agreed, managed and deployed
professional and ethical maintained
6.Strategic No awareness of Limited awareness of the Shared awareness of Some joint, project Full visibility, understanding
Alignment each other’s business other party’s strategy. No each other’s strategy and speciﬁc, strategic & alignment of strategies.
strategy activity to capture beneﬁt or understand impact on own planning between the Impacts are known and
develop opportunities strategic planning process parties jointly managed
7. Through- Through-life Capability Recognition of Through-life Through-life Capability Through-life Capability Through-life Capability
Life Capability Management not Capability Management Management limited to Management concept Management is jointly
Management considered concept. Activities limited to contractual obligations jointly integrated at a embedded within business
speciﬁc project requirements project level processes
8. Solution Little/no participation in Little, or late, participation Solutions reﬂect the Parties engaged at Full collaborative
Developments developing solutions in developing solutions. participation of both early stage of solution participation (multi
Requirements modiﬁed to ﬁt parties. Investment to meet deﬁnition. Investment to business, cross functional
current products/processes development milestones improve performance teams). Investment focused
on joint objectives
9. Value Focus solely on cost Concept of ‘Value’ is ‘Value’ is considered in ‘Value Added’ is jointly Sophisticated measures of
& price - ‘Value’ not recognised and deﬁned decision making measured. Targets ‘Value Added’ are employed.
deﬁned. established. Targets achieved/exceeded.
c Appendix c
training and education
Partnering The ongoing development of Learning (DaLearning) run required, both as an individual
is one of the commercial system means
that commercial training will
the Collaborative Working and as part of the team. There
Workshop, which aims to should be an induction pack
a number be continuously reviewed and provide managers at MOD for new entrants in which key
of new updated where needed. Band D/C2 level with an principles and ways of working
commercial appreciation of the theory of are identiﬁed. Induction
At the present time the partnering, and a practical can be supplemented by
initiatives following courses are available approach towards the periodic refresher training
which will which relate to partnering; planning and implementation and brieﬁngs at which senior
require new of a partnering culture. leaders can convey their aims
C-1 Partnering theory and expectations. This will give
training and practice DDefCP will be developing a new entrants the opportunity
courses to Core Competence Training further Collaborative Working to clarify what is expected
Event aimed at Band C1 and
be put in Courses of them, and provides an
There is a clear link between above. In the meantime, there opportunity for the leadership
place partnering behaviours and MOD are a number of available to reinforce their commitment
core competence frameworks. courses available aimed at the to behavioural requirements.
Many of the current core more senior members of both
competence training courses MOD and industry acquisition C-3 Initial and follow on
will provide awareness and teams who require expert level relationship workshops
understanding across a range training. Advice on these should The partnering process
of subjects that can then be be sought from DDefCP. includes an initial relationship
used in a partnering context. workshop at which all
The training described below C-2 Induction and team members will receive
is in addition to current core refresher training education awareness sessions
competence training. All teams will experience on the key elements of
turnover and care must be partnering. Following the
Partnering Speciﬁc Training taken to induct new entrants initial relationship workshops
Courses with the culture, ways of it will be important to hold
Defence Acquisition working, and the behaviours regular follow on workshops.
Partnering Handbook | 33
Follow on workshops will address
any issues that are raised during
the procurement cycle and place
emphasis on the behaviours required
and how to achieve them.
C-4 Links with practitioners in
other teams; secondment
One of the best sources of advice
are those “experts” who have “been
there and done it”. Increasingly,
more teams have experienced
partnering and they will be able to
share knowledge/experiences – what
went well and not so well.
Secondments, interchanges and
shadowing are other useful ways to
ﬁnd out more about partnering, from
a MOD and industry perspective. ■
d Appendix d
The following case between 1992 and 1996
MOD/Augusta- studies comprise two – necessitating a signiﬁcant
ramp up of manpower in the
Westland examples (D1 & D3) of
sector. There were no further
programmes launched over the
following 10 years and industry
JPART and two (D2 & D4) that
demonstrate a best
found it difﬁcult to predict when
the planned future programmes
Joint Partnering and practice approach to would come along.
Relationships Team (JPART) partnering. As a result, industry did not
Simon Barker, MoD/Agusta-Westland JPART
have the appropriate volume
D-1.1 Why partner? or type of work to sustain the
In summer 2004, a signiﬁcant core skills onshore that were
reduction in planned needed to provide the technical,
helicopter procurement spend, airworthiness and safety support
establishment of a new Future for the platforms currently
Rotorcraft Capability(FRC) IPT in service. If these skills
to review all future rotorcraft were to be maintained cost-
capability requirements and a effectively, then the business
further delay to major planned relationship between MOD and
requirements whilst the optimal industry needed to change.
way forward with this reduced Industrial predictability of MOD
budget was sought, brought requirements and needs had to
key issues to a head that improve, but not at the expense
had challenged the business of jeopardising the military
relationship between MOD and ﬂexibility that operational
the rotorcraft industry over commanders demand. The
the previous 20 years. Major optimal way forward appeared
procurement programmes to be to create a more solid,
(Apache, Merlin Mk1 and longer-term relationship
Merlin Mk3) were all contracted where both MOD and industry
Partnering Handbook | 35
would undergo a process of business with everything that this entails. The Heathrow Terminal
transformation. MOD would work contract is a reminder to all of what 5 etc) to understand the key
with industry to improve its visibility they promised to do. If it remains a success factors.
of needs and requirements, in return mechanism for apportioning blame • Employment of an independent
for more cost-effective output and a and seeking retribution at the ﬁrst organisation to undertake
commitment to sustain the critical sign of difﬁculty, then a partnering stakeholder assessments.
resource needs onshore. arrangement is not the solution. This established not only the
willingness and appetite for
A partnering approach was assessed D-1.2 Scope of partnering partnering, but also helped
as the optimal way to tackle the Once the justiﬁcation had been made understand the stakeholder
issues. It allows the buyer supplier that a partnering arrangement was
desires and issues surrounding
relationship to be retained, creates an the best way forward, ﬁve key actions
the business relationship.
environment where the buyer takes were taken by MOD and Agusta
business decisions in the knowledge Westland, to enable a scope to be • Full, frank and open debate
of the impact this will have on the developed that had maximum chance between the leaders of both
supply base and develops a mindset of delivering the required mutually sides of the arrangement,
of everything the buyer does, has beneﬁcial outcome: to ensure that all issues and
an impact on the suppliers ability objectives for both parties were
to perform. Creating a collaborative • A full-time joint team with tabled, debated and understood.
continuous improvement philosophy independent leadership was • Rigorous development of a suite
around this construct meant a established – the Joint Partnering of measures of success that would
partnering arrangement was the best and Relationships Team be jointly owned and that would
way forward. Above all a partnering (JPART) - to develop a scope address not only the concerns
arrangement is a deal, and one where that would deliver maximum and issues that had been raised
it must be evident that both parties mutual business beneﬁt, and in the stakeholder assessments,
beneﬁt. It also drives a mindset that independently challenge both but also encapsulated the agreed
if one party is having difﬁculty, it is partners to adopt as much of this objectives identiﬁed by the
an obligation on the other party to scope as possible. The team also leaders.
engage, be supportive and to assist in researched successful partnering • The development of a
overcoming the difﬁculty. Without this, arrangements existing in other joint business case for the
the traditional blame culture remains sectors (automotive, oil and gas, ﬁnancial and human resource
requirements for JPART to parties to develop a single plan • Signiﬁcant effort was put into
enable frameworks to be to drive cost out, performance up creating the right measures or
developed between the teams to and time down. If the “how”, is not performance indicators. Measures
embed partnering. adequately and repeatedly tackled, were created which were truly joint
then as soon as external pressures in terms of delivery, recognising and
and strains challenge the “what”, reinforcing the objectives of both
D-1.3 Implementation then the working relationship parties and they driving the right
Once the Strategic Partnering disintegrates and traditional behaviours within the project teams.
Agreement (SPA) was signed on 22nd confrontation results. This has a • Putting in place a governance
June 2006, the community embarked massively detrimental impact on structure which was not over-
upon the transformation journey output and performance. burdensome, yet gave clarity
to implement the arrangement. In of purpose was key. A two star
no particular order or priority, the policy group meets quarterly and
• To support this, investment is
following have been the key activities focuses on the strategic policy and
being made in supporting both the
of JPART and the teams to make this direction of the arrangement and
leadership and the project teams
project a success. a one star management group,
to develop and embed the same
core values, the right meeting 6 times a year, focuses on
• JPART clearly identiﬁed to the behaviours, strong relationships implementation and delivery.
leaders that “how” we are going and a totally collaborative • Engagement of the wider
to work together is equally approach to delivering the stakeholder community is key to
fundamental for success, as performance outputs. the delivery of this arrangement.
“what” we are going to do. JPART • Clarity of what the arrangement is The measures cannot be delivered
is clear that the relationship and what it isn’t was an important if transformation focuses on the
aspect is actually the harder early step in avoiding confusion IPTs and their industrial interfaces
part – putting commercial as the arrangement was ﬂowed alone. The activity must engage
frameworks in place is well out across the breadth of the the entire value chain, from the
understood by both parties and community. Simply, it was not MOD centre, through to the Front
in a partnered environment it is an abandonment of value for Line Commands and out into the
all about creating a contractual money tools, or the competitive rotary wing supply network.
framework that adequately and construct, nor was it another stick • Partnering requires strong and
appropriately incentivises both to beat industry with. charismatic leadership to initiate,
Partnering Handbook | 37
yet if the arrangement is to endure, arrangement is expected to deliver groups, who feel different degrees
investment needs to be made is greater operational output, of “ownership” of this arrangement,
in enablers that minimise the faster and cheaper than before, which in turn inﬂuences the levels of
impact of people churn and provide coupled with an effective, healthy commitment to do things differently.
supportive frameworks for the and sustained design authority
teams to deliver the outputs. Effort onshore to support current rotary Finally, successful partnering requires
is therefore being focused with the wing assets. The arrangement is a fundamental shift in the way
HR organisations on such things delivering greater openness through buyer and supplier interact, without
as codes of conduct, partnering the earlier airing of challenges removing the contractual basis of
maturity models, reward, and a confidence to share difficult project delivery. It requires clear vision,
incentivisation and recognition issues which are then debated in a strong leadership and very explicit
frameworks, training programmes, mature and constructive manner. demonstration of the values and
secondments and exchanges. behaviours that are required from the
• Finally, the arrangement needed Industry now has greater project teams to deliver the expected
to build upon (and not conﬂict or understanding of the issues and performance improvement. Whilst
confuse) the change programmes challenges facing MOD and the the MOD and AgustaWestland leaders
already underway within the MOD MOD is better informed about the have acknowledged the importance
and industry. Coherence with challenges facing industry and the of ensuring the “how” is given
Defence Industrial Strategy (DIS) impact programme decisions will priority investment and attention, the
and AgustaWestland Integration have on the whole supply chain. The appreciation of how difﬁcult this part
was a must. Everything that project teams are now also beginning is, and the levels of investment (time
the SPA sets out to achieve was to look at programmes to tackle key and money) required to instil enduring
consistent with the DIS, the risks and issues collaboratively. change is just beginning to emerge,
Defence Values for Acquisition and remains the key challenge for the
and the AW transformation The fundamental challenge is how teams as they move forward. ■
programme. to bring the entire value chain
into positively contributing to
performance improvement, so that
D-1.4 Beneﬁts, risks there is one common plan across the
and challenges whole community. MOD in particular
The main beneﬁt that this partnering has a multitude of stakeholder
The UKMFTS will deliver a cost standards of the training
UK Military Flying effective, coherent, ﬂexible and
integrated tri-service training
system would invariably
evolve to meet changing
Training System capability over a 25 year
period to cater for the future
front line requirements.
UKMFTS therefore needed
ﬂying training needs of the UK
(UKMFTS) Armed Forces. UKMFTS covers
the period from the entry of
to be ﬂexible to meet these
constraints without undergoing
incessant contract revisions.
students who have passed A Pay and Performance
Simon Frame (Bid Evaluation & Partnering Manager) through Aircrew Selection up
Sue Dowdeswell (Senior Commercial Ofﬁcer
Mechanism (PPM) which
and Head of Integrator/TSP)
to the point they leave UKMFTS incentivised alignment of
ready to enter their respective interests and goals, along with
Operational Conversion Units a robust contractual change
(OCU). mechanism was therefore
Due to the long-term nature
of the relationship required An extensive convergence
between industry, the MOD and process allowed the MOD and
the three services following industry to reﬁne potential
an extensive procurement procurement models which
strategy analysis and market would meet the requirement,
sounding exercise it was test the commercial deal
concluded that the adoption structure including the risks
of a contractual partnering which the MOD was seeking
approach (a form of Public to transfer to Industry, and
Private Partnership) would the PPM. The process also
best harness the collective provided industry with an
skills of MOD and industry. opportunity to develop their
The approach will utilise a mix consortia so that they had
of Private Finance Initiative the necessary skills to meet
(PFI) and Smart conventional the demands of the Invitation
acquisition to deliver a series of To Negotiate (ITN) and also
capabilities incrementally over served to enable the wider
a 5 to 7 year period. During this IPT and services to gain an
period (and beyond) the output understanding of industry’s
Partnering Handbook | 39
commercial drivers and motivations This relationship was to be unlike as MACE was also rejected on the
, which were key to breaking down a conventional customer/supplier grounds that the PPP/PFI nature
some of the perceived barriers to relationship in that the ability of UKMFTS meant that issues
working with industry in a partnering to apply the best practice would across the major areas would be
manner. require discussion and challenging interlinked or interdependent, and
by either party. As the TSP was numerical systems that scored bid
As a result of the incremental expected to provide a continuously components separately would not
approach to capability delivery improving system, (and was to be reveal the cumulative risk effect of
outlined above it did not make incentivised to do so under the seemingly small issues.
commercial sense to seek to PPM) the achievement of which
fix price all of UKMFTS at the would be facilitated by working in The next step was to deﬁne exactly
outset. The intention was that a partnering manner, Partnering what we meant by partnering and
the requirement for these future was grouped with continuous how it would be evaluated. Due
capabilities would be reﬁned and improvement as one of the major to the long-term nature of the
the delivery solutions developed evaluation areas. relationship, during which there
jointly between the MOD, the three would be numerous changes of
services and industry. This would The other two major areas were personnel, the deﬁnition and
require new ways of working and the technical (training design, system evaluation of partnering also had
evaluation process had to recognise implementation and detailed to address the support, direction,
that only a fraction of the bid would solutions for the first packages culture and long-term goals of the
feature a fully–developed technical of work to be implemented) and bidders parent companies, and
solution (along with its associated commercial (legal and financial). ultimately the MOD and services.
ﬁxed price). A high proportion of Each was given equal importance After contacting numerous projects
the evaluation process therefore (not ‘weighting’) in the evaluation and organisations, who often
focused on the bidders ability to scheme in that the bidder had limited their approach to deﬁning
demonstrate the competences which to reach a minimum standard in appropriate behaviours, the IPT
would be required from an industry each of the three evaluation areas. was put in touch with partnering
appointed Training System Partner There was no weighting which consultants [Soma Consulting Ltd]
(TSP). One of the key competences favoured one area over another. via the NAO. Initial work focussed
would therefore be the ability This approach was adopted because on the IPT communicating the
to work constructively with the the IPT wanted to make it very approach behind the UKMFTS
multiple stakeholders that made clear that it regarded successful construct and jointly developing
up the MOD, services and TSPs partnering as critical to the with the consultants an appropriate
subcontractors over a long period success of the UKMFTS project. A evaluation model which would
– i.e. partnering. numerical weighting system such cover the issues that we deemed
important to the success of the – because it was more relevant. The support and alignment for
MOD-industry relationship. areas were: partnering together and with the
MOD and services. Evaluated
The final model was based upon the • Consortia understanding – through interviews with
Peters and Waterman “Seven-S” medium importance selected employees, customers
model which not only addressed How the bidders understanding and suppliers at selected
the behaviours required to sustain of partnering is portrayed in projects. [How the parent
a partnering relationship, but also the tender documents, within a companies would support
covered the background areas specific partnering section, and working with us in the future?]
which would require alignment throughout their bid [how they
to support successful project intended to work with us To achieve stakeholder buy-in to
delivery. Some areas of the model on UKMFTS]. what was a novel approach and to
were defined as “critical” – being provide objectivity through using
the most enduring and difficult to • Behaviours in the bid process – multiple viewpoints, the evaluation
change – this is where partnering medium importance team consisted of a core team,
capability is demonstrated at the made up of members of the IPT
strategic level. The partnering How do behaviours exhibited
by the bid teams reflect the and Customer 2, and a larger
model and evaluation process was alternating team made of additional
presented to the bidders in separate required behaviours for a
successful partnering approach. members of the IPT, Customer 1
two-stage meetings, which allowed
Evaluated through pre- and and tri-service representatives
them to discuss the presentations
post-bid response workshops of the wider user community.
and return with questions. To
to provide formative and This and an extensive education
evaluate the background areas
developmental feedback to the and training scheme covering
which would support the bidders
bid teams on group dynamics partnering, the contract, risk and
ability to align with the MOD and
and behaviours, and through reward in payment mechanisms,
services (and vice versa) the
evaluating behaviours within PFI/PPP deals and service provision
partnering evaluation was divided
negotiation meetings and solution contracts in general helped to
into three areas. These three areas
development workshops. How address some of the concerns
were prioritised as they provided
they are working now? expressed about partnering, the
evidence with which to populate
the different areas of the model. most common of which were;
prioritisation meant that when • Underlying organisation
there was conflicting evidence, the assessment – high importance • Partnering is about “Fluffy-
priority went to the evidence area How do the underlying member bunny stuff” / “Tree hugging”/
assigned the higher importance organisations operate to ensure “Being Nice”.
Partnering Handbook | 41
• The bidders will “shampoo” • The contract must act as an It was anticipated that the bidder
themselves for evaluation. enabler not a blocker to the which would achieve the best
• Would we obtain consistent and project.Complex long term partnering evaluation result would
credible results? contracts require a different way be the one that demonstrated that
• Surely Partnering won’t really be a of working but partnering is not an it had understood the link between
discriminator?” excuse for a poor contract. successful partnering and project
• A taut contract which makes success. Support from parent
• Partnering will undermine the organizations and key ﬁgures within
contract”. clear which party is bearing and
managing risk is still needed. those bodies would also be essential
• “Partnering develops naturally to ensure that the partnering approach
anyway” [at the project level • and bid evaluation model.
was part of the organisational culture
during the implementation phase]. and hence could be sustained and
The reality and perception of equity developed over the long-term.
of treatment was of paramount Evidence for this would be expected
The core and wider evaluation important in what could be seen
team received additional training to be found throughout the bid. Some
as a ‘subjective’ evaluation area, generic evaluation ﬁndings were:
covering partnering, evaluation especially in view of the fact that
and interview techniques and the (to our knowledge) a partnering
interpersonal skills and behaviours • The honesty of bidders – and this
evaluation of this nature had not was consistent with customers
that were needed to work in a been carried out before. To ensure
cooperative manner. The potential and suppliers.
a coherent and consistent picture
clash between the conventional was gathered the evaluation was • High level of consistency within
attitude towards commercial issues conducted by peer review of each evidence areas.
and partnering as well as assurance team members evaluation of the • Clear correlation across all three
for what was a novel approach were evidence areas and this was in partnering evidence areas.
addressed through the then turn collated to provide an agreed • Use of language – appropriate
Senior Commercial Officer (SCO) evaluation for each area. An audit to partnering when describing
being a member of the core trail back to relevant examples working together at all levels.
evaluation team. was maintained to illustrate
• Extremely close correlation
the findings and to ensure that
The SCO was very keen to ensure that with continuous improvement
the collation of evidence did not
all involved were clear regarding the evaluation.
inadvertently change the meanings
following: of any findings. When each • The bidders approach to
evidence area had been collated the partnering was reﬂected in the
• The contract forms part of the interdependencies were examined approach to the commercial and
project environment. to determine the final markings. technical areas (and vice versa).
What lessons did we learn during the Reviewing the process it was • Establish trust – openness and
evaluation process and through the realised that there were some key honesty.
latest stages? foundations that needed to be in • Disagree without being
place before we could attempt to disagreeable.
• We recognised the need to align understand, evaluate and develop a
• Accept and offer feedback.
in multiple areas. Partnering successful partnering relationship.
is not just about behaviours. • Agree – do not impose.
Behaviours are simply one To ensure that the evaluation • A need to recognise conﬂict as
of the areas to be addressed. was approached with the correct not necessarily a bad thing and
If Partnering is limited to attitude we found that the following manage it.
behaviours it will not be areas enabled or supported the
successful over the longer term. establishment of an understanding Note: The evaluation of partnering
• We recognised how cultures of what partnering is, what its as part of the tender process should
and the project environment can role is within successful project be approached with care especially
delivery, and how industry should be in the area of relationships and
perceived; behaviours. All evaluation criteria
• We understood that Partnering
must be carefully considered, made
is a key enabler to project • Need to recognise the role of available to potential bidders with a
success and must feature in all Industry e.g. ‘proﬁt’ is not a dirty robust audit trail for the evaluation of
that is done – not unlike Risk word. evidence. ■
• Need to recognise the drivers for
• Language is important - to Industry ie they need to make a
change things we have to change return and have a board who they
the way we talk about them. answer to just like we do to the IAB!.
• Partnering does not excuse • Ability to see things from ‘their’
the need for a robust contract, point of view.
clear structures and a focus on • Industry must be incentivised to
successful delivery. deliver; a robust PPM is essential
• It takes courage - if we didn’t to align goals.
change our behaviours nothing • There is a relationship between
would change. risk and reward – but unlimited
• Requires commitment which risk transfer to industry is not
requires a leadership which commercially sustainable i.e. it
exhibits consistent behaviours. does not represent value for money.
Partnering Handbook | 43
D-3.1 Background approval for a funding
MOD/DML The decision to locate all
nuclear submarine refitting
increase in October 2001. The
difficulties that led to this
Partnering for the work in Devonport was taken
in 1993 and the Dockyard was
are documented in NAO (Dec
02) and PAC (Nov 03) reports.
Provision of Future sold to DML in 1997. As part
of this sale, covered in the
The project resubmission
allowed re-negotiation of the
Nuclear Facilities Sale Agreement (SA), MOD
accepted a legal liability to
contract and the project was
re-scoped. This re-scoping
in Devonport fund the construction of new
and upgraded facilities for
resulted in certain works for
completion of the upgrade of
the refitting and refuelling the Submarine Refit Complex
Dr Janice Waters of nuclear submarines. The (SRC) being removed from
Project Contract Manager – SSN Facilities D154 Project was the intended the scope of Phase 2 with
means of discharging this the intent that they would be
obligation and following completed under a later Phase
project approval from the 3 of the Project.
Treasury and Ministers, the
contract was let to DML, the The NAO Report documents
Nuclear Site Licensee, in that the Department, faced
March 1997 at the same time with significant cost
as the sale of the Dockyard. increases from DML and not
This original contract is being in a strong contractual
now termed D154 Phase 2, position, considered that they
initial concept and design had little option but to
development work having re-negotiate the contract. This
progressed under a series of negotiation concluded with
interim contracts known as the Department agreeing to
D154 Phase 1. meet the great majority of the
cost increases to protect the
During 2001 it became clear submarine refit programme.
that the approved maximum In light of this background,
cost would be exceeded and both parties were “scarred”
a resubmission to Minister and the relationship was
(DP) received Treasury very poor, with confrontation,
protectionism and mistrust being 100.0%
In developing the way forward 60.0% 54.0%
for D154 Phase 3, the provision 40.0% 26.5%
of Fleet Time Docking facilities
and DDLP facilities (collectively
called Future Nuclear Facilities), 0%
the NAO recommendations were Jul-04 Jan-05 Oct-05 Apr-06 Nov-06 -8.1%
negative response -20.0%
addressed. In relation to the project -27.0%
and commercial framework these -38.1%
related to Partnering, greater MOD -60.0%
hands-on management, increased -80.0% -70.6%
cost visibility and control and
improved management of risk.
D-3.2 How was this achieved? Suitable commercial framework
The Project LFE document conﬁrms The success of the partnering Commercial framework: The
that “Partnering has been very relationship in delivering the work commercial framework must
successful so far with the out-turn packages has been pinpointed to four be supportive of the partnering
key areas: principles and ethos. It must support
of D154 Phase 3 (consisting of three
co-operative problem solving rather
major packages of work) being
Stakeholder/management support than the more normal blame and
equivalent to a 37% conﬁdence level
Agreement of partnering principles: claim culture. The Future Nuclear
and all packages being delivered
At the beginning of the project a set of Facilities Partnering Agreement
within time and to the required
principles were developed and agreed (FNF PA) includes the partnering
speciﬁcations. The MOD/DML principles in the preamble. This
by CE DML, and MoD stakeholders.
relationship within the team has also is unusual for MOD contracts but
This was necessary to set the
shown as complete change with the becoming standard practice in the
framework for the commercial
cluster of “Health Check” metrics negotiations, organisation of JPT wider commercial world.
tracking “to what extent are the management structure, joint project
principles of trust, openness, honesty execution plans and development Note: A robust contract with a
and commitment being followed” of working practices. This set the thorough deﬁnition of the respective
moving from a negative 74% score to high level vision and was regularly roles and responsibilities of the
a positive 92% over a two and a half used as guidance in the early parties (and the remedies in
year period (see Figure 1)”. developmental stages. the event of failure to meet the
Partnering Handbook | 45
responsibilities) is of course DML is incentivised (by the fee Project board: The board is made
essential. In this context partnering payable against KPI performance) to up of the four senior members of
terms of business covering Issue work with MOD. Conversely, MOD must the JPT (the MOD and DML Team
Management would be an example of work with DML to ensure the KPIs are Leaders and the senior MOD and
how a contract might be supportive., met and the project delivers. DML Commercial Managers) along
with their respective MOD and
Commercial incentivisation and Key Effective management, DML line managers (the project
Performance Indicators (KPIs): governance, processes and sponsors). The aim of the board is to
Payment of fee against KPIs is procedures monitor adherence to the partnering
used to incentivise the desired Management practices and principles and provide a forum
behaviours and performance. The governance: Where joint MOD/ for identiﬁcation and agreement
KPIs need to DML decisions are required the of partnering and behavioural
be specifically tailored to the output relevant desk-level personnel are development plans. The Chairman
or outcome desired but as a general empowered to make them. The does not have a casting vote and the
rule performance (e.g. cost, time) aim is for decisions to be made equal power balance on the board
requires a KPI metric on output quickly and responsively by those means that consensus decisions
whilst a behaviour requires a KPI personnel with hands-on knowledge. must be reached.
metric on input. For behavioural Project progress and performance
change to be stimulated the is reported in a monthly progress Working practices and behaviours
KPIs must be targeted at the key report, the input to which is agreed Working practices, culture,
behavioural “sticking points” and by MOD and DML at the working behaviours and behavioural change:
these obviously differ from project level and then any problems or The time it takes to change culture
to project and are dependent upon emerging issues and their solutions and behaviours is not insigniﬁcant. It
the cultures and relationship are resolved at a monthly progress took about two years before the FNF
pertaining at the time. meeting, chaired by the DML team JPT got to the tipping point. During
manager and the MOD project the period of change strong leadership
Joint schedule of services: contract manager. Only major is required and concerted effort by
Responsibilities of both parties issues or those beyond the scope managers to keep team members
are enshrined in the Partnering of the FNF JPT are raised to a focussed on the goals. Each group
Agreement Schedule of Services. monthly review meeting, jointly of people will have key members
Both parties therefore have a chaired by CE DML and Naval Base who consciously or unconsciously
commercial obligation to perform Commander. This structure supports inﬂuence group thought. By
the services and KPIs are only the identiﬁcation and agreement of identifying, targeting and inﬂuencing
achievable if these are discharged solutions by those people who need the way these people think the wider
fully and correctly. This means that to implement them. group culture can be changed.
Influence is possible by recognising cynicism in both the wider MOD and improve the relationship.
an individual’s drivers and making and DML was used to foster a
clear their alignment with the team determination to do things D-3.3 Conclusion
project aims. differently. By fostering this team Success of the Future Nuclear
ethos, we have found that people Facilities Partnering relationship was
Recognition of each parties needs strive to reach or exceed targets down to activities in four key areas:
and drivers: Both corporately and irrespective of the fee or commercial
at the individual level, shared goals incentivisation associated with them.
• stakeholder/management support
were very important. They brought
the corporate parties and individuals Realistic targets and joint agreement • suitable commercial framework
together with shared objectives. of the challenges: An essential part of • effective management, governance,
However, in the case of MOD and enthusing a team is to have the targets processes and procedures
DML there were also some signiﬁcant and stretch targets identiﬁed and • working practices and behaviours
differences, such as for DML to make a agreed by the people who are actually
proﬁt and MOD to spend the minimum going to deliver them. This has worked
Each one is crucial to the
amount of money. We found it very well, especially for one speciﬁc
implementation and operation of
helpful for the parties to be open package (the Boronation Facility)
effective and sustainable Partnering.
about the differences as well as our where stretch targets were identiﬁed
similarities. In some cases “agreeing by the team and then, crucially,
‘’There is no overarching “magic bullet”
to differ” diffused tension. In a identiﬁed as extremely difﬁcult by
solution to successful establishment of
similar vein, recognition of individual senior stakeholders. This recognition
the key pillars. Success comes rather
and corporate negative experiences allowed the team to focus on success
from the detailed implementation
did a lot to aid understanding and rather than feel set up to fail.
breed a shared sense of why change of the partnering principles at every
needed to happen. Independent partnering advisor and level, at every opportunity and by
metrics: Monitoring and measuring all team members. Each small re-
Non-commercial incentivisation: trends is essential in understanding enforcement of the partnering ethos
As a general rule people enjoy the development of the partnering and good working practice stimulates
doing a good job and want relationship and where change in the right direction and
to contribute to a successful improvements or interventions need each change, however small, breeds
outcome. The team, at all levels, to be made. We used independently further change. This continues
were encouraged to show their gathered metrics but also an until the momentum is such that a
professionalism and as a “badge independently chaired “focus group” tipping point is reached. The change
of honour” to prove the detractors approach. This allowed to project and support to good practice then
wrong. Previous bad press and board to target activity to best alter becomes self-sustaining.’’ ■
Partnering Handbook | 47
The driving force for the Defence Information
Defence Infrastructure (Future) DII(F) project is the need to
establish a single information infrastructure for MOD
Information that will enable a signiﬁcant part of the Defence
Change Programme to be delivered. In doing this the
Infrastructure programme aims to:
(Future) • Enable a defence user to
access their IS services at
Following a competitive
process and approval of the
any location both within main gate business case, a
defence and remotely private sector consortium,
• Enable two or more users Atlas, was appointed as
to exchange information, delivery partner in March
comprehend and manipulate it. 2005. Content for this case
• Enable any user to access study has been drawn from the
any application functionality OGC Gateway 4 Review, dated
they require. January 2006.
• Provide every user of DII with
At the time of the review,
a quality of service appropriate
the quality and strength of
to their operational or
the partnering relationship
was judged to be high, and
• Throughout the migration approaching maturity. This
from current systems to was especially evident at
DII(F) to deliver users a the senior level. That is not
quality of service no less to say that there were not
than that at the time of
outstanding issues still to
transfer to the IPT.
be addressed, there were,
• Deliver DII through an however a decision was made
implementation plan that by each partner to accept
responds to defence priorities. a delay in respect of the
• Reduce information resolution of outstanding
infrastructure cost/seat by at commercial matters in order
least 10% by April 2006. to focus on delivery.
What was done? This has enabled the build and highly likely to occur at individual site
In reaching their conclusions on implementation phase to get up level and which cannot be planned out
the quality of the relationship the to speed quickly and has enabled of the process.’’
OGC Review team identified the major issues to be handled in a
following as being “the very best of constructive and collaborative way. ‘’The two parties, as one would
innovative • Uniquely in our experience of public expect in a Partnering project of this
good practice’’: sector projects, a joint business kind, have established a joint risk
plan for MOD and Atlas has been register. This has been done against
• There are around 1200 prepared, to a high standard a background of considerable
obligations for the MOD in the and has been distributed widely activity and pressure on the
DII(F) contract. The IPT has across both organisations. The delivery of the project. Further, the
produced a Business Guide to plan sets out the organisations’ two organisations have different
the contract and a register of joint objectives and a joint approaches to risk categorisation,
all of the obligations. The IPT vision for DII(F). We see this as scoring and management. The risk
strongly motivational and an register runs to almost 900 pages
has also identified owners for
excellent way of ensuring that and contains almost 800 risks,
each obligation to ensure that
all concerned with DII(F) have reflecting the complexity of a
they can be monitored and help
a clear understanding of what project which involves roll out to a
to ensure that they are met in a
is expected to be achieved and very wide range of stakeholders on
timely and effective way.
delivered by DII(F). more than 600 sites.
• The Partnering arrangements
are effective and reach all levels The difference in approach to
with a clear and positive steer In addition, the following observations
risk management and the sheer
coming from the very top of both were made:
number of risks has meant that a
organisations. Following the formal considerable amount of work has
contract award, both MOD and Atlas ‘’The level of commitment,
been, and still needs to be, done to
placed signiﬁcant emphasis on the understanding and support for
the project is demonstrated at the analyse, rationalise and reorganise
development of their relationship the risk register. In order to provide
through team building workshops most senior levels in MOD, to the
considerable beneﬁt of the project.’’ conﬁdence to the various boards in
and activities. They have focussed the governance structure that the
on working collaboratively on the key risks are being identiﬁed and
‘’We are satisﬁed that the project
delivery of the programme and managed, a schedule risk analysis
governance and management are
have even been prepared to set and a cost risk analysis have been
sufﬁciently strong and robust to identify
aside some of the commercial applied to the risk register. We were
quickly and deal with efﬁciently and
matters that have arisen since satisﬁed that the main risks were
constructively the issues and problems,
contract award for later resolution. which by the nature of this project, are being managed’’ ■
Partnering Handbook | 49
Partnering Handbook | 51