The National Council for Private-Public Partnerships (NCPPP) defines a PPP as:
A contractual agreement between a public agency (federal, state, local) and a private sector entity. Through this agreement, the skills and assets of each sector (public and private) are shared in delivering a service or facility for the use of the general public. In addition to the sharing of resources, each party shares in the risks and rewards potential in the delivery of the service and/or facility.9
PPPs are part of the new government model, integrating the public sector with private sector management strategies. They create greater flexibility within the public sector that allows for governments to better tailor their service provision to the unique needs of their consitituents.10 With current fiscal budget constraints, the use of alternative means of providing services and the ability to provide services at the lowest cost is becoming increasingly important.
David Osbourne's and Ted Gaebler's Reinventing Government: How the Entrepreneurial Spirit is Transforming the Public Sector, breaks down the "transformation" to the use of PPPs in the United States into a number of key ideas, most notably: using competition for the delivery of services, focusing on the outcomes of projects and customers, and foresee issues of the future.11 These initiatives were not in the vernacular of the government before the second half of the twentieth century, but these changes were critical to the innovation being seen today in local, state, and the federal government.12
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9 NCPPP - How PPPs Work. (n.d.). Welcome to The National Council for Public-Private Partnerships. Retrieved March 20, 2011, from http://ncppp.org/howpart/index.shtml#define
10 Goldsmith, S., & Eggers, W. D. (2004). Governing by network: the new shape of the public sector. Washington, D.C.: Brookings Institution Press.
11 Ibid 139, 166, 299.
12 Ibid.