19. Contracts should provide for compensation to be paid in the event that the contractor fails to meet the required performance standards, together with adequate arrangements for monitoring the contractor's performance in delivering the required services. In our report on Managing the Relationship in PFI Projects (42nd Report, Session 2001-02) 58% of authorities with a performance review process had made performance deductions from payments due to PFI contractors. This suggested that many authorities were not getting the service they required. If bids are priced on the assumption that actual performance will fall short of the required level, then contractors may not have a strong incentive to perform well.