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Public-private partnerships: Initial engagement



Initial engagement  

» Mutual benefits
» Material blockers
» Representation
» Memorandum of Understanding
» Decision-making
» Realistic timeframes
» First contract exchange
» Case-by-case

 

  • The first dialogue between parties can make or break prospective collaborations. It is worth considering whether a confidentiality agreement (i.e. a non-disclosure agreement (NDA)) signed by both parties is advisable even for the first exchange of ideas to encourage sharing of information and enable rapid progress. A number of factors can significantly ease the smooth and rapid transition from early sharing of ideas to constructive contract negotiations.

 

Best practice and options to consider
 

  • Mutual benefits. Establishing face-to-face the range and depth of benefits and their balance between parties is key to a future partnership. Ideally there need to be real benefits for everybody involved. 
  • Material blockers. Parties should discuss as early as possible any contractual arrangements, obligations or other aspects that could prevent freedom to operate or progression of the partnership. Early disclosure and transparency of conflicts of interest with other parties are also key. However, everybody needs to recognize that this is not always possible until sufficient mutual interest and trust have been established. Providing not just institutional positions but also genuine explanations will help to build trust, and can lead to problem resolution.
    Expectations that could affect operational management also need to be addressed. For example, roles and responsibilities of senior employees must be agreed upon early. Similarly, if up-front payments are required to fund any necessary R&D, then these are better discussed at an early stage. The Syngenta Foundation also recommends that parties openly discuss the similarities and differences in their operational culture and values. These are easy to dismiss as “not scientifically or financially important”, but can profoundly affect a partnership’s productivity!
  • Representation. Discussions about “material blockers” usually require additional management/business representatives. Early involvement of intellectual property and legal experts enables top managers to understand any potentially non-negotiable assumptions before they progress too far with discussions. Exclusivity, commercial exploitation, and confidentiality are common problems in this area.
  • Memorandum of Understanding. A formal signed Memorandum of Understanding (MOU) between the parties can be very helpful in setting the framework for negotiations. The MOU needs to contain the fundamental points of principle that will underpin the PPP and encourage operational problem-solving. 
  • Decision-making. It is essential that there is complete clarity about who the decision-makers are in all parties’ organizations, and who will be the negotiating representatives. This transparency about roles and responsibilities is vital for the development of trust and understanding, and for the well-timed creation of a mutually acceptable contract. During this process, representatives may wish to agree to direct links between their senior management sponsors. Such links can be particularly helpful if negotiations slow down. 
  • Realistic timeframes. Parties often have widely differing internal processes, often simply as a result of their size. Each organization needs to respect partners’ ways of working. Creating realistic expectations about the time needed for responses to proposals will help prevent frustration.
  • First contract exchange. When drafting a contract, parties are encouraged to build on the progress made during their initial meetings. The contract draft must reflect the principles already agreed. Legal departments often like to start with a standard template instead, but this can be very counterproductive. 
  • Case-by-case. For success, one key assumption needs to be that each PPP will have an individual identity and contain unique elements. Negotiations therefore run case-by-case, and parties must allocate resources accordingly.