1.2. Collaboration contract

Risks

• There is a contradiction between different sets of norms (national legislation, requirements of donor and/or Helvetas, etc.).
• The partner may have to apply the laws and regulations of the country, which can be very complex and bureaucratic, time consuming and/or be disconnected from reality. These norms may not be compliant with good practices and Helvetas may not influence them.
• Procurement procedures and quality standards are too vague.
• Oriented too much on the objectives and outcome, leaving aside detailed budget planning.
• Requirements and deliverables are clearly defined but they are beyond the capacity of the partner to implement them.
• When subcontracting is allowed, it could diminish the quality of deliverables or finance the (informal) network of the partner.

Good practice

• Anticipate weak rules and regulations and make the necessary arrangements with the donor in bilateral agreement (for example support the partner to develop its rules, transfer of responsibility fully to the partner, etc).
• Clearly define deliverables as well as procedural, administrative and financial requirements.

Risks

• Terms and conditions of the contract are poorly defined.
• Delays in contract signature, which may indicate issues that may be connected to bad management or even kickbacks.
• Helvetas does not have leverage and authority to act, in case of weak or inadequate procurement of the partner, especially the “assisted organisations”.

Good practice

• Ensure that the needed leverage is implemented in the contract through rules and requirements.
• Clear agreement, easy to understand by all parties and may include the following elements:
  • Apply the agreed principles and rules. If the partner procurement procedures are not according to Helvetas expectations, negotiate if the Helvetas or donor rules can be applied by the partner. There may be more room for negotiation with civil society organisations and private companies compared to public institutions. Private companies are profit oriented; hence partner values should match those of Helvetas as much as possible.
  • Clearly define roles and responsibilities. Helvetas should have a facilitative role, but negotiate if Helvetas can impose a veto right if the process has not been performed adequately. If approval by Helvetas is required (for example when partner capacities are too weak), limit it to the adequacy of the process rather than its outcome. When application of partner rules is mandatory and the room for monitoring is limited, transfer the responsibility fully from Helvetas to the partner. If the partner is imposed by the donor, document the identified risks and limitations of Helvetas monitoring, and get an acknowledgment from the donor. In case an issue arises, there is a documented notice of concern evidencing due diligence of Helvetas.
  • All employees of the partner sign the code of conduct or integrate it in their working contracts. Alternatively, include the code of conduct as a clause or annex to the collaboration agreement whereby the partner takes full responsibility for the actions of its representatives. If partner’s code of conduct is not appropriate, negotiate if Helvetas code of conduct can be used by the partner.
  • Clearly define commitments of the partner (for example co-financing, engagement of staff members, maintenance of the project/investment, anti-corruption measures, etc).
  • If subcontracting is allowed, apply the code of conduct and procurement principles to the third party as well.
  • Define modalities of support for the partner. When possible and appropriate (for example partner capacities are too weak), Helvetas should have leverage and assume a role in approving the execution of the process.
  • Define activities, deliverables and acceptance standards, milestones, which are equally understandable for all the parties.
  • Detail the budget with the commitments of the partner, and payment schedules. Tie the payment schedules with the deliverables to execute the final payment only upon fully met obligations by the partner (correct procurement process and deliverables according to the agreement).
  • Delays, warranty, bank guarantee, as well as third party liabilities.
  • Obligations of the partner for the required documentation.
  • Monitoring by the partner, Helvetas and/or the community (social audit). This could also include specific monitoring plans.
  • Limits to contract amendments.
  • Audit requirements, standards to be followed, timelines, etc. Negotiate the possibility for an external audit commissioned by Helvetas.
  • Consequences for not complying with the agreement (for example retendering, penalties, termination of the agreement, etc).