Why are some contracts successful and others not?

29 July 2011
Renata Towlson is senior buyer (best practice) at Nottingham University Hospitals NHS TrustI have learned over the years that in the land of public procurement it is the scope of failure that most provokes the asking of the question: ‘Why?’ It is one of the most important logs during the life of major projects and complex, organisational procurement exercises. Yet ‘why?’ is seldom asked in the event of success. I am well aware of the evolution of contract law, models, theories and concepts. Some of them have proved to be very successful and we tend to repeat their patterns again and again, almost without thought. Others that are not so successful fall by the wayside, victims of the question: ‘Why did they fail?’ The public sector is very good at looking for root causes once failure occurs, but seldom does it do the opposite. Legal aspects of contracts, the letter of procedures and policies, although invaluable in practice, only build up a superstructure that constitutes useful add-ons and a quick fix rather than the true essence of successful contracts. What defines this true essence is a meaningful relationship between its stakeholders – one that is not merely layer upon layer of legalities, but a mutually unique understanding of the needs and outcomes of all concerned. Although in saying this, I am far from underestimating the risks that the contemporary market is exposed to. I am even further from underestimating the work of the legal profession that assists the market stakeholders in remedying contractual breaches or disadvantages. However, in the contemporary state of the market players’ consciousness, it is becoming increasingly clear that these institutions play their part in failure rather than success. It is trust, confidence and the sharing of the same philosophy, ethics and morals that bring success, nothing else. These are difficult financial times in the public sector. A lot of us enter into uncomfortable negotiations with our suppliers to reduce spend, realise saving opportunities, take some of the cost pressures from front-line services and share the unwelcome burden – the measure of success in today’s health market being ‘the best for less’. But can we achieve this? Can we make our new measure of success possible just by utilising so tirelessly the ready-built, flat-packed superstructures of the present day? No we can’t, because superstructures are created as a result of previous failures in response to the question of why something failed with very little resource being put into the question of why it was successful. Is it, perhaps, due to the fact that in analysing failure we are gathering facts and figures, while in cases of success we think these speak for themselves and, therefore, do not require interpretation. In truth, they require it even more analysis, because success is always unique, while failure is repetitive. By asking: ‘Why was this contract successful?’ we might be able to determine the unique variables that constituted its success.
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