2.5 As noted in the introduction, generally, only soft services are suitable for benchmarking and market testing. By 'soft services' this Guidance means services such as facilities management in an accommodation project (typically catering and cleaning etc to the extent that they do not involve a significant capital outlay in their performance, or affect the value of any capital asset.) The definition is used because the prices charged must be competitive with those of potential alternative sub-contractors and it is not realistic to expect a price, including previous capital costs that have been incurred by a sub-contractor, to be competitive with a bid which does not include these. Services such as building refits or life-cycle maintenance should not normally be benchmarked or market tested. However, some technical support areas which involve provision of plant and equipment may be suitable for benchmarking / market testing if already packaged into sub-contractor supply arrangements. As detailed previously, the contract will define what services are subject to benchmarking / market testing.
2.6 Benchmarking and market testing may be across individual, a combination or all applicable services. This will depend on the Project Agreement drafting.
2.7 It should be noted that the benchmarking and market testing processes compare the PPP cost of the service or services against other PPP benchmarks (internal or external).