All guidance documents contain a section addressing the need for governments to avoid entering into major contracts or undertakings. The guidances reflect commercial realities by recognising the need for much of the work of government to continue during the caretaker period. As such, consideration is given to the definition of the word ‘major’ with the most common definitions revolving around the monetary value of the contract and whether proceeding with it would entrench a ‘policy, program or administrative structure’ (Commonwealth, Tas, Vic, NT). The Victorian guidance contains some additional material about allowing the entering into of contracts which are subsidiary to an existing ‘head contract’ during the caretaker period.
Most guidance documents acknowledge the difficulty of deferring contractual commitments for legal or commercial reasons and suggest options if this is the case. These include:
consultation with the Opposition;
consultation with the contractor to see if the contract could be renegotiated; and
the development of contracts which include a clause providing for termination in case an incoming government did not wish to proceed.
Jurisdictions with fixed parliamentary terms may find managing contractual arrangements less complex, since the regular election date is known in advance.
The management of contracts is routine administration for many departments, and often involves long lead-times. The guidance documents suggest that caution should be exercised in cases which fall under the definition of ‘major’, or that require ministerial approval.
Controversy arises when contracts are seen to breach caretaker conventions by giving electoral advantage to the incumbent government, or when they are interpreted as seeking to entrench a controversial policy. Such contention was avoided in Victoria in 1999, when the Minister for Health—who had been defeated at the election but who remained minister pending the swearing in of the new government—delegated to the Secretary of his Department responsibility for finalising a contract that, if not executed within a specified time-frame, would attract significant penalties. This action was taken on the grounds that the Minister believed it was inappropriate to deal with it himself. The matter was resolved by officials in consultation with the Premier, the Leader of the Opposition, the Shadow Health Minister, political advisers and bureaucrats (Davis et al. 2001, pp. 18-19). The long delay in forming a new government in Victoria after the 1999 election was problematic for other types of contracts. Davis et al. (2001, p. 19) report that new procedures were required to allow urgent contracts to be finalised in the post-election caretaker period.