The evidence from this research and from earlier research by the National Audit Office (NAO) demonstrates that PPP procurement has resulted in significant improvements over conventional procurement in delivering projects on time and within budget. PPP provides a strong incentive for contractors to complete assets to an agreed timetable in order to start receiving payments.
In particular, PPP has demonstrated to authorities the benefits of specifying requirements up-front and minimising any changes during the construction period. Authorities should be encouraged to import these lessons into conventional procurement. Similarly, PPP contracts have demonstrated the benefits of using fixed price contracts with clear risk allocation. These lessons could also be applied more widely in conventional procurement6, for example through the use of fixed price turn-key Design and Build contract structures.
The need in PPP projects to specify requirements in detail and early on has also played a role in focusing authorities' attention on design issues. Although detailed design risk is transferred to the private sector, our interviews suggest that authorities in Scotland have remained heavily involved in developing PPP projects. They have looked to international best practice, sought input from users and, more recently, used specialist design tools to support them. Again, we think that these approaches could usefully be imported into conventional procurement methods (although see below for discussion of the impact of PPP on whole life costing).
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6 With the exception of some special situations, for example complex IT contracts.