A well-drafted Performance Specification is fundamental to developing a robust P3 Agreement and the successful delivery of long-term services. It is part of a process that is fundamentally different to traditional procurement in that the emphasis is on the service outcomes and outputs, explicit allocation of risks, and the integration of design and build with the operation of facilities.
In comparison, conventional procurement methodology is often an iterative process in which an outline of the capital project is drawn up and costed. Further iterations and costing revisions normally occur during the planning and design process before a final scheme is agreed and the contract for construction is tendered. Using this process, the risks of cost increases and failure due to inappropriate design, planning, etc, tend to fall on the department. Traditionally, only limited account is taken of ongoing running costs in terms of building life-cycle maintenance, the ongoing provision of services, and the efficiency of facilities.
Performance Specifications encourage a focus on overall needs and objectives. A well-produced Performance Specification should allow new ideas about the design, construction and operation to flourish. Most critically, because this approach encourages proponents to develop the means to deliver the outputs within the context of a fixed, performance-related pricing mechanism, it focuses much more attention on project risks. This should lead to better designed and operated facilities in the longer term.