1.9 The value testing of soft services should assist the Authority in ensuring that continued value for money is achieved from the PFI contract. It is not a process designed to simply cut costs for the Authority, nor for the Project Company to increase prices. Value testing is designed to ensure that prices paid for soft services reflect a competitive market rate for the services provided. It also provides an opportunity for the Authority to reconsider and, if necessary, re-scope services to meet changing need. The process should also provide an opportunity for services providers to offer new approaches and technologies to the Authority thereby maximising efficiency in service provision and user satisfaction. Successful value testing could result in tangible benefits for the public sector, such as:
• improving performance and innovation;
• improving quality and productivity;
• maintaining and improving efficiency of service delivery;
• improving performance measurement;
• refining best practice; and
• providing a better understanding of external market forces in relation to the provision of services by contractors.
1.10 Value testing provisions are included in PFI contracts because requiring a Project Company or its subcontractors, to take the risk of cost increases associated with long-term contracts, such as changes in the law, is likely to be poor value for money.