The process of comparing the method, time or cost of an operation, service or product against those of other organisations, preferably thought to be the best in the field. | |
Indication of the possible ways of delivering a service, before contract award. After the contract's award, the agreed service specification. | |
System of joint working and responsibility for running the contract. | |
The detailed standards of performance the authority requires a contractor to provide. | |
The net present value of the contract price represents the amount that would have to be invested at the the start of the contract to fund the expected future cash payments which an authority will be required to make to the contractor. | |
A description of arrangements, whereby part or all of a contractor's financial records for a project, can be seen by the authority. | |
A policy introduced by the Government in 1992 to harness private sector management and expertise in the delivery of public services, while reducing the impact of public borrowing. | |
The allocation of risk and reward should be clearly defined and private sector returns should be genuinely subject to risk; and the contracts should represent value for money, taking into account the benefits of transferring risk to the private sector and the cost of that transfer. | |
A benchmark against which value for money is assessed. It is typically a cost estimate based on the assumption that assets are acquired through conventional funding and that the procurer retains significant managerial responsibility and exposure to risk. | |
The passing of risk under the contract between the public sector and the private finance provider. | |
The periodic payment that the public sector agrees to pay for the provision of services by the PFI contractor. | |
The achievement of the optimum combination of whole life cost and quality to meet the customer's requirements. |