A shocking wake-up call on Partnering from the DVLA, Fujitsu, IBM United Kingdom (and not forgetting PwC)?
This trial of preliminary issues arises out of a claim brought by Fujitsu Services Ltd against IBM United Kingdom Ltd [2014] EWHC752 (TCC). There is to be a full trial in 2015. The situation arose out of a DVLA agreement with PwC, later purchased by IBM. At the time of contract award PwC agreed to subcontract certain work to Fujitsu.
There was a partnering Agreement and that is the focus of this article. The partnering principles were set out in Annex A, and included the following statements:
Working together
- All dealings between DVLA and PwC and Fujitsu will be open, honest, clear and reliable
- Work together to achieve a relationship of mutual respect and trust
- Work together to foster and sustain positive working relationships over the full Contract Period
Transformation
- Do our best to ensure that work is mutually enjoyable and fulfilling for everyone
- Work together to generate a sense of inclusiveness
- Work together to solve problems effectively
Service delivery
- Undertake joint business planning
- Work together to stimulate innovation and creativity
The above statements, at face value, are very good, seeking to capture the essence of partnering.
So, what is the contractual implication of Annex A?
At paragraph 161 of the judgment it states:
“the principles in Annex A lack contractual certainty.
Objectively constrained, they are not intended to be the subject of direct contractual effect”
At paragraph 162 it states:
“IBM was obliged to ‘have regard to these principles’ including the principle of working together on an ‘open, honest, clear and reliable’ basis, but no more”
Earlier at paragraph 141 the judge concludes:
“the principles themselves are aspirational and motivational”
The take-away: At Brian Farrington we have negotiated a number of Partnering Agreements. We seek not to be blinded by the supplier’s enthusiasm for a Partnering Charter, proposing language similar to that shown above.
The cynicism we have is informed by what happens, if, and when, relationships sour. The lawyers will turn to the contract – that is what will happen! Caveat emptor. IBM will have good reason to be highly satisfied with the outcome of the preliminary issues.
Why Brian Farrington?
Why people with procurement risk issues want to work with the people at Brian Farrington.
There are three themes that clients tell us over and over again.
First, they tell us they believe they are making a smarter investment working with Brian Farrington — bringing a thorough understanding of their procurement risk issues and a proven track record of enabling excellent returns on their investment.
Second, clients are confident that they are working with specialists that bring experience, expertise and stay focused on client success; not on our next income target.
Finally, people, just like you, tell us they actually like working with us. They find us easy to work with and collaborative in solving issues that inevitably arise in procurement risk.
About Brian Farrington
Brian Farrington is one of the world’s longest established procurement and supply chain consultancy and executive training specialists. 33 of the current FTSE100 have retained our services, as well as leading technology, manufacturing, aerospace and defence organisations in the UK, North America, southern Africa and Asia. Established in 1978, we have proven expertise and experience in identifying and managing procurement risk.
Brian Farrington solutions and services are formed through consultancy, training & development and coaching – all underpinned by proprietary technology. Our four core areas of procurement capability are:
- Strategic review and risk governance
- Performance delivery and transition
- Major project support including partnering advice
- Learning & development in support of organisational aims.
www.Procurisk.com – The evolution of risk management For more information and instant access to the free demo site please contact Ray Gambell on 01744 20698, or [email protected]
Interested in insight on managing supplier performance? We recommend reading: “The Attributes of effective contract management?”
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