New Solutions and Public Private Partnerships

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New Solutions and Public Private Partnerships

• Process vs. Substance

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PIA 2096

• Foreign Aid, Foreign and Security Policy

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Understanding Contracting Out in the Twenty-First
Century

• The Assumptions

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Change One Relationship Between Contracts and
Projects Preview of Skills Course Next Semester

• Key Not a Grant
• Grants available to Non-Profits
• Purpose of Grants is often Sub-Grants
• Grant Gift, with conditions but not legally
  enforceable
• Can only refuse to give additional Money

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Contract

• Contract Definition
• Legally enforceable document
• Purpose
• Judicial review in event of a disagreement
  between the parties

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Contract

• A good contract is able to be understood by a
  member of the judiciary
• Projects Contracts and Grants Both define
  obligation by time and money.
• Limited time and limited money

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How Projects Really Work
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Judicial Review of Contracts

• Judge may be assumed to be a lay-person in terms
  of the technical aspects of the contract

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Judicial Review

• For judicial review the contract should strive to
  make the technical issues as clear as possible
• Understandable not just to project teams but to
  lay individuals as well

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Judicial Review of Contracts

• Few contracts are in fact brought before the
  judiciary for determination
• Nonetheless, it is this ultimate test--against
  judicial criteria--that sets the pattern for
  contract administration

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Contracts Administration
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Project Planning Documents

• Help clarify contract elements
• Consists of the following
• A meeting of the minds
• Specific deliverables
• Consideration
• Force Majeure
• Objectively Verifiable Indictors

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A Meeting of the Minds

• Intent of a contract
• Establishes for judicial review "why" the
  contract was entered into
• Includes knowing why the two parties have entered
  into a contract their long-term objectives

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Intent
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Meeting of the Minds

• Actions consistent with the meeting of the minds
  are consistent with the contract
• Actions inconsistent may constitute breach of
  contract or non-performance

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A Meeting of the Minds

• Relates directly to the purpose and goals
  identified in the projects planning document
• Project document always indicates outputs in
  the hope that it will result in an agreement that
  the task is completed

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A Meeting of the Minds

• Contractor is expected to obey reasonable
  person rule
• contractor is expected to do all the things that
  any reasonable person would do given the
  resources available, and

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Meeting of Minds

• add to the list of outputs in order to reach the
  agreed upon purpose
• contracting agent agrees to modify or add to the
  inputs in order to reach a modified meeting of
  the mind

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A Meeting of the Minds

• Contracting agent has a reasonable right to
  expect that the contractor will obey the
  reasonable person rule
• However, contractor expects that the contracting
  agent will attempt to take all reasonable actions
  necessary to realize the overall goal of the
  activities

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A Meeting of the Minds

• Purpose of Contract
• Most important project focus
• Facilitates "meeting of the minds" by clarifying
  long-term objectives

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In the Development Context

• Parties to the Contract
• Developing Country
• Sponsoring or donor agency
• USAID, the World Bank, UNDP
• Host Country
• Contractor
• NGO, For-profit private firm, University

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In the Development Context

• Developing (host) country is usually considered
  ultimate client of the contractor, although
  this is not legally binding if the contract is
  made with the donor agency

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Deliverables of Contract

• Essentially the outputs
• Things the contractor has agreed to produce

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Contract Deliverables

• Important to note that deliverables under a
  contract should be results, not activities (or
  inputs)
• Further, objectively verifiable indicators must
  be provided for each output with qualitative,
  quantitative, and time targets

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Consideration

• Essence of a contract, particularly in terms of
  its equity provisions
• What do a contractor and contracting agent each
  promise to provide each other?

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Consideration

• Minimum guarantee is the inputs
• Contractor agrees to provide technical personnel,
  commodities and undertake activities, etc.
• Sponsor agrees to pay contractor certain fees,
  and may provide on-site support, etc. as agreed
  upon in the contract

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Force Majeure

• The project framework documents and the contract
  clarify force majeure by
• Identifying factors that require re-analysis of
  the ability to perform
• Setting levels at which those factors become
  important

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Force Majeure

• At input level, contractor identifies assumptions
  that must be made in order to guarantee ability
  to produce outputs

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Force Majeure

• Example If the contractor assumes that host
  government will provide ten vehicles and drivers
  in order produce the project outputs, but in fact
  only five are provided, then we expect a
  corresponding reduction in the quantity or
  quality of outputs produced

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Objectively Verifiable Indicators

• Indicators that determine if the terms of a
  contract have been met
• To avoid a misunderstanding and provide an
  objective means for recognizing successful
  achievement of the project objectives, the
  contract and associated planning documents must
  establish objectively verifiable indicators

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Objectively Verifiable Indicators

• Indicators show the results of an activity
• Not the conditions necessary to achieve those
  results
• Indicators clarify exactly what we mean by our
  statement of the objectives at each level in the
  project planning document

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Objectively Verifiable Indicators

• At input level
• only concerned with consumption of project
  resources
• At the purpose level
• These are of particular importance and are given
  a special name
• End of Project Status (EOPS)

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Coffee Break

• Ten Minutes

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Change- 2

• Focus For Profits Non-Profits for Service
  Delivery After 1975
• Contracts vs. Tied Grants

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Change 3- Old Patterns

• Long Term Cooperative Agreements (1970s)- Ten to
  Fifteen Years
• Land Tenure Center University of Wisconsin
• Center for Disease Control in Atlanta
• National Association of Schools of Public Affairs
  and Administration

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Grants and Contracts- 1980s

• Non-Profits- Grants and Sub-Grants- Function like
  Contracts
• Contracts- For Profits- Project Driven
• Cooperative Agreements- Long Term Grant
  Commitments (Up to 20 years)

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An Example 1985- USAID Cooperative Agreement
Performance Management Project

• National Association of Public Affairs and
  Administration (NASPAA)
• DPMC Department of Agric.
• IDMC Univ. of Maryland
• Director Dr. Louis A. Picard

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Performance Management Project

• Research Group
• 
  
  
  
• Rondinelli -Foreign Aid
• Kerrigan and Luke- Training
• Hague and Finsterbusch-Orga-nizational
  Development
• Kiggundu- Managing organizations
• White Program Management
• White- Policy Reform
• Brinkerhoff strategic Management
• Esman-Development Management

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Field Operations

• INCAE- Sub-Contract to Catholic University,
  Paraguay (W. Schaeffer)
• Swaziland- Rukudzo Murapa
• Indonesia- David Korten
• Francophone Africa David Gould
• Guinea- Robert Groelsema

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Technical Assistance

• Policy Reform
• S. Morrison, Africa,
• R. Moore, Guatamala
• Barry Ames, Brazil
• Management
• FDMS-Gould-sub-contract U. of Pittsburgh
• SADCC Study J. Montgomery, R. Klitgaard, et.al.
• Business Management- J. McCullough
• Decentralization
• Ed Connerley and Elinor Ostrom

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Change- 4

• Continuities and Change in Financing- 2001

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Financing Mechanisms

• Contracts
• IQCs
• Cooperative Agreements
• Projectization of Foreign Aid
• Categorical Grants with sub-grant mechanisms
  (more like contracts)

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Public Private PartnershipsThe International
Context After 1991

• Defined
• Partnerships (formal or informal) between
• Non-Governmental Organizations (NGOs),
• Community Based Organizations (CBOs),
• Governments,
• Donors (International and Private),
• Private- Business Sector.

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Public Private Partnerships

• Origins-
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• a. International Donors- Way of Dealing with
  Umbrella Grants and implementation of development
  policies
•  
• b. Accepting donor money means accepting donor
  principles

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Public Private Partnerships

• c. Comes out of Structural Adjustment and Policy
  Reform Structural Adjustment with a Human Face
•  
• d. Seen by some as an alternative to Contracting
  Out- Others as part of it
•  
• e. Critics see it as detrimental to a market
  approach to economic change

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Public Private Partnerships

• Characteristics-
• a. Targeted at the expansion of Social Capital
  and Synergy in the promotion of Economic and
  Social Development
•   b. Seeks a holistic or Integrated Approach to
  Economic and Social Development
•   c. Involves informal processes, cultural
  sensitivities as well as legal norms and
  contracting principles.

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Public Private Partnerships (PPPs)

• PPP Supporting Factors in the International
  Context
•   1. Democratic Governance- private sector and
  NGOs seen as legitimate actors transparency,
  accountability and responsiveness
•  
• 2. Rational Government- Merit Principles,
  anti-corruption environment, acceptance of
  non-state actors as service deliverers.
  Contracting Out

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Public Private Partnerships- Factors

• Factors that Support PPPs 
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• 3. Decentralization- Subsidiarity Governance
  devolved to the lowest levels capable of
  implementation and contracting out
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• 4. Legal Frameworks- Acceptance of Contractual
  Agreement as the basic organizational relationship

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Public Private Partnerships-Factors

• 5. Institutional Norms, Organizational
  Capacity and regularized principles of
  inter-organizational interaction. Requires high
  levels of capacity building
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• 6. Social and Economic Stability
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• 7. Organizational flexibility across all
• sectors

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Public Private Partnerships- Factors

• 8. Social and Institutional Pluralism- win-win
  rather than zero sum game across social, ethnic,
  religious and racial groups
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• 9. Social Networks exist at Grass roots, and
  intermediate as well as higher levels of
  government-See diagram

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Discussion

• Jennifer M. Brinkerhoff,
• Partnership for International Development
  Rhetoric or ResultsBoulder, Co. Lynne Rienner
  Publishers, 2002