3.2 The contract should describe what services are to be benchmarked and what they are to be benchmarked against, although this may not be the case in some earlier PFI contracts. It is important that agreement on methodology is reached at an early stage. Benchmarking should be carried out on an open book basis; the data and the data source should be open to review and challenge. The Authority needs to have full access to all raw data and understand the methods by which cited figures were reached. This is so all parties can have confidence in the process. The box below summarises the methodology to be employed in a benchmarking exercise.
Box 3.2 Benchmarking Methodology: |
• the exercise is to be undertaken by both parties; |
• agree the scope; |
• where possible, use an objective comparison to previously agreed reference sites, i.e. general hospitals of a similar size; |
• the exercise will compare the prices, standards and specifics of similar services; |
• the benchmark providers and the current provider must be similar in terms of skill and reputation; |
• benchmarking is on an open basis - all numbers are transparent and there are no locked spreadsheets; |
• the Authority and Project Company to exchange information on benchmark prices; |
• if the Authority is satisfied - notify the Project Company and amend contract prices, if relevant; |
• if the Authority is not satisfied - move to market testing. |