Provider selection and management


Provider selection and management is the process of identifying, selecting, appointing and supervising providers through the P3 life cycle.


Provider management continues throughout the life cycle. The process will vary in detail from one sector to another but generally follows six steps. It needs to be scaled to be fit for purpose and should be neither onerous nor superficial. The process should be reviewed and approved by appropriate stakeholders and documented in the resource management plan.

Figure 3.13: Provider selection and management process

The research step involves identifying the providers that have the required capability. This may be unnecessary where there is already a regularly reviewed and up-to-date approved provider list.

Research may result in a long list of potential providers. Pre-qualification seeks to reduce this list by a number of means. A typical approach is to send out a pre-qualification questionnaire to gather information from potential providers. This may clarify the production capacity of the provider, their willingness to tender, their financial stability and their technical experience. It may also ask for references for similar work.

The pre-qualification results in a shortlist of providers who will be asked to provide a full bid against a defined set of requirements. Tendering is an important process in its own right and a P3 manager may need to seek specialist help. It is important that the requirements are clear and all providers are given an equal chance of success.

Records associated with selection should be maintained and archived to contain risks associated with potential challenges by unsuccessful providers. Inputs to the selection process should include an appropriate risk analysis in addition to cost, time and quality considerations as defined in the resource management plan. Where possible, a reserve provider should be identified. For critical goods and services the contract may be split amongst several providers as a form of risk containment.

Award will involve the negotiation and agreement of a contract to supply goods and services. Attention needs to be paid throughout the whole selection process to ensure that a contract is not casually entered into, and it should be made clear in all meetings and in associated documents that the proceedings are subject to contract.

Once a contract is awarded, it is important that the relationship between the project, programme or portfolio and the provider is actively managed. Although much effort may have been invested in the binding contract, resorting to the contract to resolve disputes should be seen as a last resort. P3 managers must regard providers as members of the team and communicate effectively.

Once the goods or services to be supplied by the provider have been delivered and accepted, the contract will be closed. This will involve ensuring that all financial arrangements have been honoured, all changes to the contract have been accounted for, and may involve setting up a maintenance contract to support, repair or upgrade goods provided.


The shorter timescale of projects means that provider selection may be focused entirely on the optimisation of cost, timescale and quality of delivery of the specific requirement. Scaling of the selection process will be of high importance, as selection costs will need to be funded entirely from the project budget.

A project manager wishing to procure a solution to complex or innovative requirements may not know exactly how best to meet the requirements and may enter into a dialogue with potential providers to help develop a solution. Where this is the case, clear rules on disclosure of information from one potential provider to another need to be established and maintained, both for the reputation of the purchaser and for legal compliance.

On smaller projects there will be less opportunity for the project manager to develop a relationship with the provider. In such situations the selection process needs to ensure that the mechanisms for supplying the goods or services are as routine and low risk as possible.


The programme management team will decide whether providers are to be handled at project or programme level. Typical situations to consider are:

  • providers supplying goods or services to multiple projects;
  • specialist providers working on one project;
  • risky contracts that need specialist procurement expertise;
  • routine supplies;
  • on-going maintenance that supports benefits realisation.

All these factors will be taken into account when preparing the resource management plan.


Portfolio management teams have the greatest opportunity to consider long-term partnerships with providers. A portfolio can set up ‘framework agreements’ with providers. The portfolio management team will complete the selection process and set up contracts that projects and programmes can use to call off goods or services at agreed rates. This greatly reduces the effort required for the selection process.

The relationship with framework providers will be handled at portfolio level but there will still be many providers that have to be selected to meet the demands of individual projects and programmes. The portfolio management team will set out the process to be used and will maintain an overview to identify common needs.


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