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Apportioning risk lies at the heart of the contractual challenge
Last modified: 2010-06-09
Abstract
This paper examines how purchase-of-service contracts have directly impacted on Not for Profit Organisations (NFPOs) through the shifting of risk. It examines the nature of the risks that lie in the contractual relationship between the government and the individual NFPO.
This paper draws on data from a larger research project conducted through a partnership with the Whitlam Institute and the Social Justice and Social Change Research Centre, both from the University of Western Sydney; and, the Public Interest and Advocacy Centre (PIAC). The project, which was funded by UWS and Jobs Australia, consisted of interviews with senior staff from 24 NFPOs and legal analysis of a range of existing contracts. The interviews and contract analysis were followed by sector discussions and consultation with experts.
Beck argues that while industrial society distributed ‘goods’, late modern society distributes ‘bads’ in the form of ‘risk’. This research found that purchase-of-service contracts have significantly shifted risk from government to the contracted NFPOs. This has increased resource pressures on NFPOs with reports of increased financial exposure. The project report concludes that “The contract, its terms and application, lies at the heart of these matters. Though resolving the contractual issues will not be a total solution, it would go a long way towards redressing the present imbalance” (p.25). This paper will examine the nature and the extent of the risk, the level of shifting with purchase-of-service contracts and the possibility of altering contracts.
The full report – A Question of Balance: principles, contracts and the government-not-for-profit relationship.– is available at: http://uws.clients.squiz.net/whitlam/publications
Beck, Ulrich 1992 Risk society : towards a new modernity. Sage London
This paper draws on data from a larger research project conducted through a partnership with the Whitlam Institute and the Social Justice and Social Change Research Centre, both from the University of Western Sydney; and, the Public Interest and Advocacy Centre (PIAC). The project, which was funded by UWS and Jobs Australia, consisted of interviews with senior staff from 24 NFPOs and legal analysis of a range of existing contracts. The interviews and contract analysis were followed by sector discussions and consultation with experts.
Beck argues that while industrial society distributed ‘goods’, late modern society distributes ‘bads’ in the form of ‘risk’. This research found that purchase-of-service contracts have significantly shifted risk from government to the contracted NFPOs. This has increased resource pressures on NFPOs with reports of increased financial exposure. The project report concludes that “The contract, its terms and application, lies at the heart of these matters. Though resolving the contractual issues will not be a total solution, it would go a long way towards redressing the present imbalance” (p.25). This paper will examine the nature and the extent of the risk, the level of shifting with purchase-of-service contracts and the possibility of altering contracts.
The full report – A Question of Balance: principles, contracts and the government-not-for-profit relationship.– is available at: http://uws.clients.squiz.net/whitlam/publications
Beck, Ulrich 1992 Risk society : towards a new modernity. Sage London