Reframing Public Private Partnerships Through ‘Performance’ Contracting

Abstract

Many governments and aid agencies are of the view that the use of ‘performance’ regulations could better meet their demands for ‘value’. The use of ‘performance’ regulations is now mandated by some national building codes. Despite this, there has been a struggle with policy implementation. At the imple- mentation level, owners and contractors seem as yet unready and less than willing to use ‘performance’ specifications, so use of ‘prescriptive’ specifications prevails. In addition, there is no universally accepted, legally binding ‘performance’ contract. This research finds that the use of ‘performance’ specifications by an owner to express ‘value’ requirements can be responded to by tenderers using ‘prescriptive’ specifications. The use of an interpretative methodology, a case study and interviews/correspondence with various stakeholders demonstrates the validity of this research, which could now be extended to public private partnership projects. Pre-contract award, critical success factors include the use of a ‘performance’ contract and a competitive tendering process which favours innovation, with tender selection based on ‘value’ rather than lowest price. Post contract award, these arrangements provide opportunity for owner or contractor to be innovative within the contract structure.