While a national PSC standard is one important and necessary means of imposing transparency and accountability on government decisions, it is also essential that the structure and performance of public-private contracts be regularly reviewed. The National Audit Office (NAO) in the UK has a reputation as being one of the harshest critics of its private finance initiative, and has become invaluable in putting forward recommendations that improve on past performances. And, these recommendations are regularly incorporated into the PFI structure. There is also an ongoing push in the UK to publicly disclose all of the costs and financial commitments associated with the project. As an example, a record of future contract payments for each scheme and the capital value of contracts signed to date and in procurement are disclosed in the Financial Statement and Budget Report. This process not only leads to better management of programs, but it also increases the accountability and openness of the program, which lends itself to greater market and public confidence. Much of the public criticism surrounding P3 projects in Canada has centered on the lack of transparency and questionable accountability in deal structures. To help dispel these concerns, Canadian governments should be more forthcoming with their objectives and payment structures. This is one area where the federal government could help define national reporting and monitoring standards.
Canadian governments can also enhance transparency by simplifying the P3 process with standardised contracts. This has been an effective tool in the UK, where the government has drafted contracts that attempt to maintain the flexibility to set individual needs and requirements, but also provide a standard form for those aspects common to all procurements. This initiative is still very much a work-in-progress in the UK but preliminary efforts have been well received by all parties since it levels the playing field for bidders, reduces bid costs and expedites the government procurement process - all of which bolsters competitive procurement to the benefit of taxpayers.
Canada's smaller, less mature, and inconsistent P3 market already creates a challenging environment towards lower bid costs, and the absence of standardized contracts adds further upward pressure. What's more, standardization does not need to be limited to just common contractual elements, but also common design elements. For example, there are 154 hospitals in Ontario, and yet there is no standard for how an emergency room is best represented. Is it necessary that governments reinvent the wheel every time a hospital is designed? Probably not.