Accountability in PPPs is achieved primarily through the monitoring of the private partner's performance. The PPP should be structured around established public objectives that are gauged through performance standards and measures that are negotiated and specified in the contract. These standards should be regularly measured and consistently monitored and evaluated by the public partner.
In defining measures and indicators, it is important to focus on key outcomes that capture the quality of service provided rather than the method by which it is provided.85 Adopting such an outcome oriented-approach focuses the PPP on performance, and allows the private partner adequate flexibility in achieving the overall objectives of the partnership. For example, one of key objectives of the London Underground PPPs is to provide commuters with a pleasant traveling environment. On a quarterly basis, data is collected by an independent survey organization that measures train and station attributes such as cleanliness of train cars, condition of train seats, levels of litter and graffiti, condition of waiting rooms and bathrooms, and the appearance of elevators and escalators. These attributes are weighted and aggregated to form a total score for station ambience.86 Collecting these performance measures also allows for benchmarking performance, so that the private partner's performance can be judged against prior performance, but also that of comparable institutions or direct government provision. The standards for acceptable ambience, for example, were set at levels above those achieved through prior public operation and are now measured against prior- as well as anticipated- performance. For other standards, such as maintenance, measures are assessed against accepted industry benchmarks. 87 This allows for effectively evaluating whether a PPP is operating in as cost-efficient or customer-oriented a manner as expected.
In defining measures and indicators, it is important to focus on key outcomes that capture the quality of service provided rather than the method by which it is provided.85 Adopting such an outcome oriented-approach focuses the PPP on performance, and allows the private partner adequate flexibility in achieving the overall objectives of the partnership. For example, one of key objectives of the London Underground PPPs is to provide commuters with a pleasant traveling environment. On a quarterly basis, data is collected by an independent survey organization that measures train and station attributes such as cleanliness of train cars, condition of train seats, levels of litter and graffiti, condition of waiting rooms and bathrooms, and the appearance of elevators and escalators. These attributes are weighted and aggregated to form a total score for station ambience.86 Collecting these performance measures also allows for benchmarking performance, so that the private partner's performance can be judged against prior performance, but also that of comparable institutions or direct government provision. The standards for acceptable ambience, for example, were set at levels above those achieved through prior public operation and are now measured against prior- as well as anticipated- performance. For other standards, such as maintenance, measures are assessed against accepted industry benchmarks. 87 This allows for effectively evaluating whether a PPP is operating in as cost-efficient or customer-oriented a manner as expected.
In the United States, many state and local governments have a poor record of performance measurement and management for their own operations and face difficulties in applying these skills to PPPs Few states and municipalities engage in rigorous performance management and/or reporting. In its latest review, the Government Performance Project gave only five states an "A" grade in Information- a category that includes budgeting for performance, managing for performance and performance auditing- with the national average being a mediocre "B-." (New York was below the average, earning a "C ," with budgeting for performance noted as a particular weakness.) 88
This lack of sophistication carries over to performance standards in contracts, which are "often poorly developed, weak or ill-conceived."89 This problem often stems from a lack of expertise, but it also reflects the under-funding or under-staffing of such functions in many government agencies. Even where expertise or resources exist, they tend to be focused on project delivery aspects such as delays or cost overruns, but not on ongoing operations. 90 Successful PPPs require that sufficient expertise and resources be cultivated and devoted to monitoring performance of the private partner throughout the life of the contract.
The importance of this has been duly recognized in the U.K., where national government agencies have issued guidelines for local governments, including a standardized contract that can be used as a basis for a PFI arrangement. There are also established institutional supports for public administrators to aid in all phases of contract management, from initial analysis and negotiation to ongoing monitoring and termination.
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85 National Audit Office. "Managing the Relationship to Secure a Successful Partnership in PFI Projects." 29 November 2001. Report by the Comptroller and Auditor General. HC375 Session 2001-2002.
86 Metronet Rail. "Metronet Rail: Performance Measures." Accessed 9 September 2008. Available online at http://www.metronetrail.com/default.asp?sID=1079542145940.
87 Transport for London. "London Underground and the PPP: Data Summary 2006/2007." 2007. Available online at http://www.tfl.gov.uk/corporate/modesoftransport/londonunderground/management/1582.aspx.
88 The Pew Center on the States' Government Performance Project. Information Performance Grades for 2008. Accessed 11 August 2008. Available online at http://www.pewcenteronthestates.org/uploadedFiles/Information%20Performance.pdf.
89 Deborah Auger. "Privatization, Contracting and the States: Lessons from State Government." Public Productivity and Management Review. vol. 22, no 4, June 1999, pp. 435-454.
90 Deloitte Research. "Closing America's Infrastructure Gap: The Role of Public-Private Partnerships." 2007. Available online at http://www.deloitte.com/dtt/cda/doc/content/us_ps_PPPUS_final(1).pdf.