4.17 It is very unlikely that benchmarks will be agreed without an element of clarification and potentially negotiation. The PPP contractor will not only report on the benchmarking data but may have to run scenarios through their financial model for the PPP contract. This is important to ensure that the PPP contractor remains as a viable supplier for the long-term contract. For the public sector interest, it will be necessary to use technical and financial advisers during these stages to ensure that whatever outcome is reached within the benchmarking exercise leaves the wider PPP contract in a strong position regarding affordability and value for money for the public sector client as well as the PPP contractor. An example of this relates to treatment of overheads. The parties need to be particularly careful about any adjustments to management overhead proposed as an addition to the direct benchmark cost.
4.18 Data and sources must be transparent, and the Authority must get into the detail and understand them. If a PPP contractor showed any reluctance to provide information, the public sector client would be entitled to consider whether it could continue with the benchmarking process or move to market testing.