The community expects to receive services in the form of outputs. The means by which these outputs are achieved is important only in so far as the delivery of outputs does not waste scarce resources. The accurate and detailed specification of outputs helps to ensure that only the required amount of resources is consumed to produce the outputs.
What are outputs? The following are examples of outputs and the associated input:
■ access to healthcare is the output of a hospital;
■ vocational education is the output of a university or college;
■ serviced accommodation is the output of an office building; and
■ the accommodation of offenders is an output of a prison.
A clear and accurate statement of core requirements - outputs - is crucial to developing an output specification that will underpin the entire project. A clear specification of the core requirements is essential, as this will define the elements of the partnerships contract that cannot be varied if the defined service need is to be met.
Other aspects of the output specification are largely discretionary in nature, but must be clearly distinguished from the core requirements. The inclusion of discretionary elements enables tenderers to offer innovative or "packaged" solutions that may provide better value for money.
Deciding which elements to include or leave out is a matter of skill and judgement. Including unnecessary information may confuse the essential issues. The primary task is to include all such information that provides a better understanding of the needs to be serviced. The output specification should, as a minimum, contain the following elements:
■ the policy outcomes and context within which the outputs are required;
■ a statement of the agency's requirements in clear and concise terms;
■ ensure that all relevant information required by proponents to prepare their bids for the services is included;
■ encourage proponents to develop innovative solutions if possible;
■ specify any constraints that are essential to delivery, eg planning requirements;
■ provide a briefing on the major risks that the private sector will be required to manage; and
■ indicate, to the greatest extent possible, the standard or quality of output required and the expected timeframe for delivery.
Privately supplied infrastructure projects are generally procured through a negotiated procedure. The output specification must be a flexible document that can be refined as circumstance changes, but only to the extent that it does not provide an unfair advantage to any particular proponent or group of proponents, or impede the delivery of the core requirements.
It is essential that the project team have due regard for probity at all times in developing and refining output specifications, particularly the protection of innovative ideas or intellectual property. Under no circumstances should the intellectual property of bidders be included in the output specification without the prior consent of the owner of the intellectual property.
The majority of infrastructure projects entail lengthy contractual arrangements, often twenty-five years or more. The services required at the beginning of the period may vary considerably over the life of the agreement. The potential for variation in services, where applicable, needs to be addressed in the output specification. This is usually achieved through pre-specified benchmarking reviews.
The output specification will need to be fixed before invitations to tender are issued. Care must be taken that the final output specification is not framed in a manner that may unjustifiably favour a particular solution.
Further guidance as to the design of the output specification is provided in Attachment C.