4.2 The contract should describe what services are to be benchmarked and what they are to be benchmarked against but, in many instances (particularly in the earliest PPP contracts), this may not be the case. It is important that agreement on the scope of benchmarking be reached at an early stage. Key to a successful benchmark is:
i. identifying base cost price (from financial close or the previous benchmarked price as adjusted)
ii. identifying indexation uplifts
iii. understanding how i. and ii. related to the contractors current / live version of the agreed form financial model taking account of any previous adjustments that may have arisen.
4.3 The base cost price should be separately identified within the financial model. During the procurement process care should be taken to ensure that the base costs are clearly identifiable and include the costs of administering the relevant soft FM service. This will ensure a level playing field for parties who are providing quotes during the market testing stage.