PPPs have the reputation of being less expensive than traditional public-sector procurements and of moving faster than public-sector projects-with the potential bonus of moving the project off the public sector's books for accounting purposes.
Elliott Sclar tackles the misconception that a PPP is always less expensive in his book You Don't Always Get What You Pay For: The Economics of Privatization. Sclar proposes a comparable but slightly different take on output-based contracting and cites numerous examples of private contracting run amok and where public contracting has delivered.
Sclar recommends specific tools, processes, and checks to make sure a PPP is the right solution, such as specifying the service to be provided in detail, preparing a thorough pre-proposal cost accounting[xxii] (Value for Money (VfM) over the life of the project), and performing a historical review of the publicly-provided service. He also proposes that the private sector develop a thorough understanding of the people involved to preserve employment levels, maximize historical knowledge, and meet other legal requirements (such as the prevailing wage rate).
To achieve best value, true competition is required but not always to be had. Frequently, the number of private sector firms able to perform larger infrastructure projects is limited, resulting in the potential for monopolies or near-monopolies. Sclar also points out that a PPP does not relieve the public sector of the costs and responsibility of preparing and managing the contract, sometimes resulting in hidden costs.