Glossary of Terms

Benchmarking

The process of comparing the cost and/or quality of an operation, service or product against those of other organisations, preferably thought to be the best in the field.

Change of law risk

The risk that future changes in legislation, for example, employment law, may lead to higher costs for the provider of the services.

ForceĀ majeure

Events over which the parties to the contract have little control, but which could have serious impacts on performance of the contract. These may include war, rebellion, nuclear explosion and earthquakes.

Information Memorandum

A formal document written and supplied by National Savings to bidders, which included financial and other information about the operational service, inviting them to provide their views on how the private sector could provide best value for money in delivering the operational service and costed responses.

Invitation to Negotiate

A formal communication to selected suppliers.

Key Performance Indicators (KPIs)

The detailed standards of performance National Savings requires SBS to provide in eight areas of the operational service.

Output specification

Specified aspect of the customer's service requirements or performance specification, for which the customer sets minimum quality standards to be met by bids.

Public Sector Comparator

An estimate of what a project would cost if traditional public sector procurement methods were used.

Risk transfer

The passing of risk under the contract between the public sector and the private sector service provider.

Volume risk

The risk that service volumes (transactions) may be higher or lower than forecast volumes, thus possibly affecting the amount of payments.