Managing Collaborative Arrangements: A Guide for Regional Managers

C. Forming a collaborative arrangement⁴

General guidance when developing a collaborative arrangement

Increasingly, departments are using collaborative arrangements for delivering on departmental mandates. Indeed, the ability to build alliances, form partnerships, and effectively manage horizontal arrangements, is, in many cases, key to delivering high-quality, cost-effective services to Canadians.

While this section focuses primarily on how to structure formal arrangements, it is recognized that not all situations require spending a lot of time and energy crafting a formal agreement between parties that wish to cooperate on a project.

For example, in cases where the parties agree to work together without transferring any resources to one of the partners, a formal memorandum of understanding may not be necessary. However, it is still useful, sometimes very important, to have some type of documentation (e.g. minutes of meetings, letters) to clarify the contributions and expectations of each of the partners and to help sustain commitments. At a minimum, this could serve to ensure continuity in the cooperation and smooth transitions when individual officers change from time to time.

When cost sharing is occasional and of low dollar value, it may still not be necessary to put in place an elaborate agreement. For example, when a contract needs to be tendered for the acquisition of a service for the benefit of the partner departments, it may be more practical and efficient for one of the partners to manage the administrative process.

This administrative procedure can be kept simpler by avoiding advance payments (no need to set up an ‘other government department suspense account' – explained in next section). Just make sure there is adequate documentation/arrangement in support of each department's requirement for the service (or good) to provide the basis for charging and recovering the costs on the part of the administering department, and for paying on the part of the other departments. Such arrangement should include:

• A description of the respective responsibilities of the parties involved
• Details of the services or goods to be provided
• Date(s) when such services or goods are to be provided
• The estimated cost involved
• The terms and conditions under which recoveries will be made
• Any other terms and conditions as considered necessary

In many circumstances, the nature and complexity of the partnership initiative require clear frameworks and mechanisms for decision-making, accountability and reporting. It is usually advantageous to establish a joint framework at the outset that clearly sets this out. This framework need not be overly elaborate and can evolve over time as partners gain experience at working with it. One increasingly common and beneficial approach utilized by managers is the development of Results-based Management and Accountability Frameworks (RMAFs). Created in collaboration with partners, RMAFs help managers establish a:

• Sound governance structure
• Results-based logic model
• Performance measurement strategy
• Evaluation strategy
• Reporting strategy

Establishing and documenting a collaborative arrangement

The principles and understandings underpinning the collaborative arrangement must be articulated clearly and precisely in the agreement. Good intentions and a firm handshake are important to get a partnership off on the right track, but an agreement that is clear and comprehensive provides the foundation to keep it there. If the text is too restrictive or, conversely, too open to interpretation, problems will inevitably result.

Collaborative agreements can be formal or informal, and structured in a variety of ways (i.e., Memoranda of Understanding, contractual arrangements, undertakings, or specifically-tailored agreements). However, certain core elements are common to most collaborative arrangements as outlined in sub-section “Purpose and nature of a collaborative initiative or partnership”. The generic collaborative arrangement framework provided in this section incorporates those core elements. It is a point of departure for organizing your thoughts and for structuring and perhaps even assigning related work. Arranging work files along these lines, and building on them throughout the process will leave you better positioned when it comes time to draft the agreement. It will also prove valuable in responding to planned or ad hoc briefings for ministers, senior officials and central agencies.

Policy and legal issues should be dealt with as they arise, and the resultant opinions and advice carefully maintained for reference at the drafting stage and during the life of the agreement. Departmental functional specialists – particularly in areas such as finance, contracting, human resources and legal services – should be kept informed so that potential problems can be identified and resolved at as early a stage as possible. For similar reasons, departments are encouraged to seek clarification on any outstanding issues or requirements with the Treasury Board Secretariat (TBS) or to otherwise engage TBS officials early in the process.

Selecting the partners

Partners should each have something the other wants – or should both want the same thing: it is important to consider what you need and what you can offer in return. This self-assessment process will allow you to inventory and place a quantifiable or qualitative value on your marketable ‘assets' and to list potential partners. Another way of identifying potential partners is to identify a need (information), task (build a bridge) or area of responsibility (community development) that you have in common, and explore the possibilities for collaboration (perhaps involving other parties).

Partners should have compatible – not necessarily identical – values and goals, including a shared commitment to provide quality service at a fair cost to citizens. Partnerships in the public interest do not rule out arrangements with profit-oriented private sector partners. A government product or service with revenue-generating potential may offer a good opportunity to partner with the private sector to supply and/or operate the related system or process -- thereby enhancing service and reducing costs.

Partners should strive for fairness in the sharing of responsibilities, costs, risks and benefits. Negotiators will try to achieve a good deal for their principals. But think twice if your potential partners are out to win the negotiations at your expense.

By the same token, it would be contradictory for either potential partner to try to dictate the terms and conditions of the arrangement. In some cases, however, public officials may legitimately lack ‘negotiating room' due to legislative or regulatory constraints. In an open and transparent process, this information should be shared with the potential partner at the outset to manage expectations and maintain trust. Everything else should be placed on the negotiating table.

Partners should exhibit a capacity and willingness to be flexible and adaptable. Partnerships are dynamic relationships; increasingly, they take place in a rapidly changing and turbulent environment. You will want a partner that can weather the inevitable rough spots and take advantage of unexpected opportunities.

Generic collaborative arrangement framework

This framework is only a guide; it is not a substitute for consultation with and contributions by functional authorities and legal advisors. But it does offer an organized frame of reference for thinking about the issues to be addressed and the actions to be taken when conceptualizing, planning, negotiating and documenting a collaborative arrangement:

Purpose and specific intentions

• Outline the policy and operational rationale for the collaborative arrangement and its contribution to the achievement of organizational mandates and strategic directions.
• Specify target beneficiaries. Outline planned outcomes/services in terms of quality, cost and accessibility, and their relationship to beneficiaries' needs and expectations.

Programs, products or services

• Provide a clear description of the programs, products or services to be delivered or acquired, along with negotiated specs, quality and content requirements, and relevant performance or service standards to be met by the partners.

• Establish criteria and essential terms and conditions governing eligibility and access, by citizens/clients or partner organizations, to the relevant programs, products or services.

• Ensure that the arrangement is framed in such a way as to maximize and not restrict the advantages of the partnership in terms of program and service delivery. Aim for the best case from the beneficiaries' perspective, explore the possibilities, and then adjust, as required, to conform to relevant policies and regulations.

Roles and responsibilities

• Highlight the complementary and value-added roles and responsibilities that will be performed by individual partners to the agreement.

• Document the operational, administrative, monitoring, reporting and management functions to be carried out – either by one partner or both (accountability linkage).

• Ensure that functions/roles are well integrated to provide seamless, high quality service delivery to beneficiaries.

Authorities

• Clarify legislative, financial and other authorities under which the partnership has been approved and will be administered. Partnership proponents may have to seek specific additional authorities or flexibility from their department HQ or Treasury Board. Note: Departmental managers seeking guidance on such issues should contact their departmental financial specialists first. If the departmental headquarters financial specialists require any further direction, they in turn will contact the Treasury Board Secretariat.

• In all cases, but particularly where non-government organizations and community or volunteer groups are involved, ensure that the individual signing the agreement has the requisite legal authority to commit the organization to the terms of the partnership.

Definitions

• Provide clarity and precision for technical and other terms specific to the partnership that are not of common usage, or where the meaning of the same word or phrase may vary. This ensures mutual understanding at all stages of discussions, and promotes consistent interpretation of the agreement.

Resource details

• Specify the nature and amount of knowledge/information, financial, materiel, real property, human and ‘in-kind' resources that each partner has committed to the development, delivery, administration and/or acquisition of a program, product or service (and related overhead to manage the partnership). The ‘flow' or actual use of these resources will normally be defined in chronological terms (per federal fiscal year), by project/initiative, by stage or phase and/or be linked to project performance or results/outcomes. While renewal and adjustment provisions can be incorporated into the agreement and funding re-visited, financial commitments should be ‘capped' and should not be open-ended.
• Clarify if federal financing is in the form of grants, repayable (by partners and/or clients) or non-repayable contributions, or operating funds, as well as the applicable leverage ratio (public/private dollars). An example would be government dollars to be contributed to the initiative, or the government's agreed upon and capped share of potential losses, as compared to the funds invested or share of potential losses assumed by the other partners. Where contributions to the private sector partner are made by more than one government entity, departments should determine if stacking of government assistance is an issue.
• If corporate sponsorships or donations from the private sector or other organizations are a definite or potential source of financing for the partnership, departments should consult with the Comptrollership Branch of TBS to establish the need for a ‘specified purpose account' and the conditions under which such funds can be used. The Policy on Specified Purpose Accounts can be found on the Treasury Board Web site (http://www.tbs-sct.gc.ca/index_e.asp). The Comptrollership Search Index, in particular, provides a very comprehensive source of financial information, policies and directives on everything from activity-based costing to workforce adjustment.

Monitoring, reporting, and evaluation and audit plans

• Develop a clear accountability framework for the management of the partnership. This is important to ensure the systems are in place to monitor how the partnership is doing, to measure and report on results, and to assign responsibility for corrective action.

• Identify and agree on indicators for outputs and outcomes.

• Establish a feedback mechanism to solicit the views of beneficiaries/stakeholders on the service provided and on other outputs of the partnership. This information will complement performance data compiled through departmental measurement systems and periodic evaluations.

• Develop a reporting strategy that ensures that plans are in place to report on the results of ongoing performance measurement and evaluation, and that reporting commitments are met.

• Seek advice from auditors, as required, to anticipate and/or coordinate any audit requirements. Inform your partners of planned audits in areas covered by the collaborative arrangement.

• All information on performance, expenditures against plans, and the achievement of results/outcomes, should be fed into the partnership management structure, and/or the executive branches of the partners on an ongoing basis.

Adjustment, expansion, renewal, dispute resolution and termination clauses

• Establish mechanisms to respond effectively to financial and performance information (e.g., variances) and other changed circumstances to resolve problems, take advantage of opportunities, take on additional partners, or otherwise fine-tune the partnership. Partnerships are dynamic relationships carried out over the middle and long term; changes are inevitable. Flexibility should be built into the agreement to ensure changes can be made quickly and with a minimum of process.

• Identify, as appropriate, a multiple-stage dispute resolution system. These could range from direct discussions in the management committee, for example, to discussions between senior level representatives of the partner organizations.

Termination

• Negotiate and document the conditions under which the partnership can be terminated. A termination clause should provide for a notification (“cooling off”) period. It should also outline the respective responsibilities of the partners for managing to their conclusion any outstanding commitments to clients or other stakeholders. In some cases, it will also involve the ultimate disposition of the assets of the partnership (including intellectual property, licenses, etc.) and potential human resource (HR) issues.

Results-based Management and Accountability Framework (RMAF)⁵

Results for Canadians, the management framework for the federal government, clearly sets out the requirement for public service managers to manage for results. Many of the social and economic outcomes (results) the government of Canada aims to achieve require the contribution of two or more departments, jurisdictions or non-governmental organizations.

In June 2000, the Treasury Board Policy on Transfer Payments formalized the Results-based Management and Accountability Framework as a component of Treasury Board submissions involving transfer payments. In April 2001, the Treasury Board Evaluation Policy identified RMAFs more generally as valuable management tools for major policies, programs and initiatives.

A Results-based Management and Accountability Framework is intended to help managers:

• Describe clear roles and responsibilities for the main partners involved in delivering the policy, program or initiative – a sound governance structure.

• Ensure clear and logical design that ties resources to expected outcomes – a results-based logic model that shows a logical sequence of activities, outputs and a chain of outcomes for the policy, program or initiative.

• Determine appropriate performance measures and a sound performance measurement strategy that allows managers to track progress, measure outcomes, support subsequent evaluation work, learn and make adjustments to improve, all on an ongoing basis.

• Set out any evaluation work that is expected to be done over the lifecycle of a policy, program or initiative.

• Ensure adequate reporting of outcomes.

The development of an RMAF is not mandatory unless a Treasury Board submission for a Transfer Payment (Grants, Contributions) is involved. However, it represents a sound and beneficial approach to results-based management. It is particularly useful for managing horizontal initiatives that are complex and where clarity of the respective roles, responsibilities and accountabilities of all partners is critical.

Managers should refer to the Companion Guide - The Development of Results-based Management Frameworks for Horizontal Initiatives for practical advice on how to develop effective RMAFs for horizontal initiatives.

“Not a Tool Kit”

Another very useful document to assist organizations in defining program objectives and determining performance measures is a publication prepared by Mark Schacter of the Institute On Governance, titled “Not a Tool Kit”.

Best practices

• Agree at the outset on common objectives, performance measures, reporting requirements and evaluation plans.

• Look for ways in which to harmonize and streamline reporting requirements.

• Test the proposed methodologies with the people that will be required to collect and analyze data.

• Think through who will use the data and for what purpose.

• Re-visit the reporting plan before launching the project in order to ensure that it is still relevant, practicable and not burdensome.

• Eliminate duplication and overlap in reporting requirements.

RECOMMENDED STEPS

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* Some financial agreements may be required in addition to the collaborative agreement, depending on the nature of the financial participation of the partners. More details are provided in the next section.

Note: See Annex F for information on developing Memoranda of Understanding and Annex G for a checklist for the design and management of new horizontal initiatives.