We looked for adequate performance monitoring and incentives. The Government needs to be in a position to confirm that the private party is performing according to the output specifications in the contract. Savings and other benefits do not automatically flow from a PFP. Whatever the estimated value for money of such a contract when it is first signed, any subsequent poor management can result in higher costs, wasted resources, impaired performance and public concern.
We found that:
■ the incentives for performance are clearly designed to encourage good performance by the contractor, with appropriate benchmarks
■ the reporting and monitoring system has been thoroughly prescribed and is considered appropriate for the task. However, as it is largely reliant on self-monitoring by the contractor, DET will need to carefully oversight and regularly audit the effectiveness of the system
■ there are adequate contract mechanisms that DET can use to make changes to school facilities, or to intervene as necessary - such as in the case of poor contractor performance
■ DET had not as yet completed work on a Contract Administration Manual to identify what needs to be done by whom and when
■ there needs to be an appropriate process of review, removed from the day-to-day function of contract administration.