6.23 There must be a system for measuring the performance of the private sector operator against the requirements and performance standards for the facility or service specified. The principles and the framework of the performance monitoring regime should be developed in consultation with the NHSScotland body's advisers and the end users. The performance monitoring regime will need to be developed sufficiently so that details can be set out as part of the payment mechanism in the Invitation to Participate in Dialogue ("ITPD"). Since the private sector operator and the NHSScotland body must work in partnership, the performance monitoring system should be robust, challenging and fair, but not needlessly intrusive or excessive.
6.24 The NHSScotland body should also consider whether monitoring systems should be led by the private sector operator and supported by the NHSScotland body's own systems. It is not necessary to fully develop systems which the operator will be asked to provide. However, the measures provide an important input into the payment mechanism, a procedure for calculating the fee due to the supplier for the delivery of the service. They should be developed sufficiently so that the NHSScotland body has a clear idea of how the performance of services will be measured and so that participants have a clear idea of what is expected of them. The NHSScotland body should retain the right to monitor performance directly, e.g. as an extreme measure in the event of default.
6.25 The main objectives for the measurement framework are:
• to provide an objective method of measuring performance;
• to minimise the time spent by the NHSScotland body on monitoring;
• to provide incentives to meet the minimum requirements.
6.26 Bidding is costly and the NHSScotland body must bear in mind that unless potential participants have all the information they need about the output specifications, they may either not bid or may price bids higher which would adversely affect the value for money and affordability of the scheme. Therefore, before prospective participants undertake detailed work based on the output specification, they could be given an opportunity to comment on the proposed format and content and to seek clarification on any points. They could also be asked to suggest any amendments that they consider appropriate. NHS bodies should also be aware that participants may seek reimbursement if NHS bodies seek clarification meetings after their stated date for the conclusion of the dialogue phase and they may be required to defray participants additional expenses by agreeing a formula for their repayment. To avoid this, NHS bodies should make sure that participants are given sufficient information, support and guidance through the procurement process and ensure the Invitation to Participate in Dialogue, information provided during the dialogue phase and the Invitation to Submit Final Tenders is fully developed and fit for purpose.
6.27 The nature of the output specifications and the performance measurement regime will need to be incorporated into the payment mechanism which the NHSScotland body will need to develop as part of the Invitation To Participate in Dialogue and Dialogue phase. Payment mechanisms are also discussed in Chapter 5 of Section 3 on Technical & Commercial Issues of this guidance. A payment mechanism briefing note has been issued by the SG Infrastructure Investments Unit which provides further guidance on the development and management of the payment mechanism.
6.28 A key area to consider is performance related risk for the operator and how this will be reflected in the payment mechanism to ensure both that the operator is incentivised to maintain high levels of performance and that suitable deductions are made to payments for poor or non-performance.