The contract process

At the beginning of 2008, a united public transport sector in Sweden presented the Ministry of Enterprise, Energy and Communication with its goal to double the market share of public transport in the somewhat shorter term and the volume of travel by public transport by 2020.

In Spring 2009, the sector presented its expert report entitled ”Business Model for Doubled Public Transport” as basic input for a discussion on how public transport should be developed.

The purpose of this report is to give a concrete form to the proposals in the Business Model and to provide proposals for the way in which the sector, with the help of developed contract forms, should work towards achieving the doubling goal. The report is a tool for purchasers, transport companies and local authorities in their common efforts to create contracts that “drive” development in this direction. The process is aimed at increasing professionalism and entrepreneurship and less micromanagement and more of management by objectives.


The core of the contract process is the recommended approach, which incorporates an inherent driving force to acquire more customers in a resource-effective way. This is the process which - in a transparent confidence-inspiring way - will lead to the most suitable type of contract in relation to the goals we wish to achieve. It is a question of a step-by-step approach based on a carefully considered process.

 

The present situation describes how work is currently conducted within the sector on different types of contract. The next step involves reflection over the role public transport should have in the future based on the common sector vision, the doubling goal and the shared values that constitute the basis for the common sector investments in seamless co-operation in order to achieve the doubling goal. After this the political platform for the work on contracts is studied within each region, i.e. the regional plan developed by the purchaser in which public transport is viewed in a wider context.

 

With this as a basic starting point, what can the various sector players do in order to contribute towards the doubling goal and the vision? In other words, what is the purpose of/game plan for the future contracts? Subsequently, an account is given of what it is important to achieve with the agreement, i.e. the goals, and what needs to be done in order to achieve these goals.

 

The analyses and discussions in the first five steps of the working process serve as the basis for a discussion between the parties in the next step in a process that is referred to as Consultation before Procurement. Once this has been performed, in the next stage the question is taken up as to which division of work between the parties is the most effective. This will lead to the conclusion on which form of contract is the most suitable bearing in mind the established goals, the adopted division of work between the parties, etc. In the final stage the question is discussed of how the contracts are followed up.

 

In order to acquire a concrete impression of what should be included in different types of contract on the basis of what is hoped to be achieved from the contracts, an account is given in Enclosures of special model agreements for service concession contracts, travel incentive contracts, production contracts, co-operation contracts and contracts for sub-order-directed transport services. These model contracts contain the basic commercial conditions and thus constitute a stable platform for the parties to work from the outside in the direction of common goals. Consequently, the agreements do not specify in detail the actual approach.

 

The contract process is aimed at a wide target group. It is important that both politicians as well as officials on different levels in the various authorities, organisations and companies within the sector should have a sound knowledge of how the contract work should be conducted in order for the contracts to be able to play the role they must have as strategic tools for increasing the volume of travel and the market share.